Japanese Shares Jumped Thanks to Suga’s Decision

Japanese shares rose on Friday after Prime Minister Yoshihide Suga said he will not be running in the upcoming leadership election. He announced his decision on Friday. The country’s leader told journalists that he originally planned to run in the September 29 race to lead his governing Liberal Democratic Party.

He decided to focus on coronavirus measures. Prime Minister Yoshihide Suga faced criticism as well as nosediving public support over a coronavirus response. However, Suga said he invested all his energy into important policies including the virus response since he took office. Yoshihide Suga took office less than a year ago in mid-September after his predecessor resigned due to health issues. Prime Minister Yoshihide Suga enjoyed support ratings as high as 70% early in his tenure because Suga was a leader from the common people rather than blue-blood political families.

Suga’s announcement is largely seen as a political move so his party Liberal Democratic Party can have a new leader before the national elections later this year. Currently, Liberal Democratic Party has the majority in parliament. So, most likely the party’s new leader will replace Suga.

Now, let’s get back to Japanese shares. The Nikkei 225 gained 2.05% to end its trading day at 29,128.11. The Topix index rose 1.61% to close at 2,015.45. On Friday, Japanese manufacturing stocks saw big gains, with Fanuc jumping 3.46% while JFE Holdings gained 6.49%.

Mainland Chinese stocks suffered losses on Friday. The Shanghai composite fell 0.55% while the Shenzhen component dropped 0.769%.

The Caixin/Markit services Purchasing Managers’ Index (PMI) dropped to 46.7 in August from 54.9 in July. Also, the official non-manufacturing PMI showed contraction in the sector for the first time in more than a year.

Hong Kong’s Hang Seng index fell 0.89%. Shares of Alibaba listed in Hong Kong dropped more than 3% following reports that it is set to invest 100 billion yuan by 2025 for “common prosperity”.

In South Korea, the Kospi added 0.84%. Australia’s S&P/ASX 200 advanced 0.5% to close at 7,522.90.

Besides, MSCI’s largest index of Asia-Pacific shares outside Japan gained 0.1%.

Overnight in the U.S., the Dow Jones Industrial Average rose 131. 29 points to 35,443.82. The S&P 500 gained 0.28% to 4,536.95. The Nasdaq Composite advanced 0.14% to close at 15,331.18.

Those gains came ahead of U.S. employment report for the previous month, set for release at 8:30 a.m. ET.

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