Japan's Nikkei Index Drops 4.7% After Ishiba Named Prime Minister
- The Nikkei 225 index dropped nearly 5% after Shigeru Ishiba was selected as Japan's next prime minister.
- Ishiba plans to continue the economic policies of his predecessor, Fumio Kishida, while supporting interest rate increases.
- Concerns over a stronger yen and its impact on exporters have led to significant declines in shares of major Japanese automotive companies.
Japan's Nikkei 225 index experienced a significant decline of nearly 5% following the ruling Liberal Democrats' selection of Shigeru Ishiba as the next prime minister. Ishiba, a former defense minister, is set to take over from Fumio Kishida, who resigned amid falling popularity. Analysts noted that Ishiba's main rival, Economic Security Minister Sanae Takaichi, was perceived as a more favorable choice for investors. Ishiba's economic policies are expected to largely mirror Kishida's, focusing on reviving Japan's sluggish growth. However, his support for raising interest rates and taxes on corporate profits and financial assets has raised concerns among exporters, as a stronger yen could negatively impact their overseas sales. The dollar's value against the yen dropped significantly after the party's vote, reflecting market reactions to the leadership change. Ishiba's approach may lead to further volatility in the stock market as investors assess the implications of his policies on Japan's economy.