The equity market will likely have large swings in the near term until there’s more clarity around Ishiba’s policies, according to analysts. The yen rose sharply on Ishiba’s win. A stronger currency will likely drag down exporters while banks will likely get a boost on optimism their profits will increase with higher rates.
Japanese stocks will likely tumble on Monday after Shigeru Ishiba’s surprise victory in the ruling party’s leadership race raised expectations that interest rates will increase.
Nikkei 225 Stock Average futures sank 6% in Osaka following Ishiba’s selection Friday after trading in Tokyo had closed for the day. The Nikkei 225 had jumped 2.3% before the final result as traders bet on a victory by Sanae Takaichi, who opposes higher rates.
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