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Japan PM Suga decides to step down; Nikkei rises

Reuters/Tokyo
Filed on September 3, 2021

(Reuters)

The Japanese yen bobbled higher before drifting a fraction lower to 110.025 per dollar.


Japanese Prime Minister Yoshihide Suga said on Friday he had decided not to run in the ruling Liberal Democratic Party's leadership race, setting the stage for his replacement after just one year in office.

Japan's TOPIX stock index rose 1.6 per cent to a 30-year high in afternoon trade after the news and the Nikkei jumped about 1.8 per cent. The Japanese yen bobbled higher before drifting a fraction lower to 110.025 per dollar.

Here are some reactions to the news from politicians and market watchers:

TOSHIHIRO NIKAI, SECRETARY-GENERAL, LIBERAL DEMOCRATIC PARTY, TOKYO

“In all honesty I was surprised to hear it. But given he said this as LDP leader, I’m sure he gave the decision much thought. I thought that it wouldn’t be appropriate to argue with him, so I think it’s best to accept his decision and focus our efforts on managing the party.”

SEIKO NODA, FORMER INTERNAL AFFAIRS MINISTER, SPEAKING TO REPORTERS IN TOKYO

"This (Suga's resignation) is a situation that I had not even given any thought to."

"It felt like time had stopped, why has it come to this… as you know there was a lot of criticism, inside the party as well, and I was seeing this unfold from a distance but thought that he would continue with his role without being swayed by those voices because a job is a job."

YUKIO EDANO, HEAD OF LARGEST OPPOSITION CONSTITUTIONAL DEMOCRATIC PARTY OF JAPAN

"It is irresponsible of the Prime Minister, and I cannot help saying that the Liberal Democratic Party, which has allowed the situation to come to this, has no mandate any more to run the government."

FUMIO KISHIDA, LDP LEADERSHIP CONTENDER AND FORMER FOREIGN MINISTER

"First, I would like to look into the situation well, and only then I would like to unveil my thoughts on this."

TAKAHIDE KIUCHI, EXECUTIVE ECONOMIST, NOMURA RESEARCH INSTITUTE, TOKYO

"It's seen as favourable (by financial markets) that a government that saw its support fall considerably is ending."

"Hopes of more effective coronavirus policies are rising and that's leading to higher stock prices. Another reason is that depending on the outcome of its leadership election, the LDP may be able to avoid a big loss in the upcoming Lower House elections. If that happens, it will lead to political stability."

KOICHI NAKANO, POLITICAL SCIENCE PROFESSOR, SOPHIA UNIVERSITY

"Now that it's an open race, anyone can run ... The question is what will (former premier Shinzo) Abe and (Finance Minister Taro) Aso decide. They must be thinking whom to back - they want someone who is both popular and a puppet."

"(Administrative Reform Minister Taro) Kono may decide to run."

"(Former defence minister Shigeru) Ishiba - does he have the 20 signatures needed to run? He has 17 in his faction, in contrast to (former foreign minister Fumio) Kishida, who has a bigger faction and has made himself credible as a candidate. Ishiba has come across as indecisive."

"Kishida is the top runner for the time being but that doesn't mean his victory is assured."

DAIJU AOKI, CHIEF JAPAN ECONOMIST, UBS SUMI TRUST WEALTH MANAGEMENT, TOKYO

"It was a surprise, but it provided more certainty and forward-looking prospects rather than uncertainty as the market had been informed of Kishida's policies (at his Thursday press conference) such as expansionary fiscal policy, support for household incomes and new measures to combat the coronavirus."

TORU SUEHIRO, SENIOR ECONOMIST AT DAIWA SECURITIES, TOKYO

"Stock prices are rising based on a view that the chance of LDP's defeat in the general election has diminished because anyone other than Suga will be able to regain popularity."

"Regardless of who runs for the party leadership race with what kind of policy manifestos, the market seems to favour the increased prospect that the current LDP administration will continue stably."





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