Yen Falls, Japan’s Stocks Rise as Ishiba Steps Down

The yen falls Japan stocks rise after Prime Minister Shigeru Ishiba announced over the weekend that he will step down. The currency slipped as much as 0.7% against the dollar, erasing Friday’s gains amid growing political uncertainty. At the same time, Japanese equities moved higher, benefiting from the tailwind of a weaker yen.

Political Shift Weighs on Yen

Ishiba’s departure marks the end of a tenure overshadowed by poor election results. His exit leaves markets uncertain about Japan’s fiscal direction until a new leader is chosen. Analysts warned that longer-maturity government bonds may remain under pressure amid expectations of increased fiscal spending.

Anna Wu, cross-asset strategist at VanEck in Sydney, said Ishiba’s decision could pave the way for stability in the long term. “So while in the immediate term yen and bonds felt pressure, equities are seeing more hope than uncertainty,” she explained.

Global Oil and US Market Moves

Oil prices edged higher after OPEC+ agreed on Sunday to modestly raise production next month. The move came after crude futures slumped last week on expectations of a supply boost.

In the US, equity futures inched upward after the S&P 500 slid Friday on a weaker-than-expected jobs report. The data fueled concerns about a cooling labor market and strengthened bets on Federal Reserve rate cuts later this year.

Bond Market Reactions

Treasuries slipped at the open after rallying on Friday. The two-year yield rose one basis point to 3.52%, trimming last week’s sharp drop. The 10-year yield advanced two basis points to 4.09%. In contrast, Australian bonds opened higher, tracking gains in US Treasuries.

Commonwealth Bank of Australia strategists suggested the dollar could retest year-to-date lows, noting that markets may price in a 50-basis-point cut to the US Funds rate at next week’s Fed meeting.

China and Regional Markets in Focus

Traders are also eyeing Chinese trade data due Monday, which may reveal the impact of the US trade war on exports and growth. At the same time, China’s bond market drew attention after reports suggested officials may allow Russian energy firms to issue yuan-denominated notes again.

Market Snapshot

• Stocks: S&P 500 futures +0.3%; Japan’s Topix +0.7%; Australia’s S&P/ASX 200 –0.2%

• Currencies: Yen –0.7% at 148.46 per dollar; Euro steady at $1.1706; Offshore yuan flat at 7.1277; AUD flat at $0.6551

• Crypto: Bitcoin –0.2% at $111,092; Ether +0.2% at $4,310

• Bonds: US 10-year yield +2 bps to 4.09%; Australia 10-year –4 bps to 4.30%

• Commodities: WTI crude +0.5% at $62.21 a barrel; Gold steady

Outlook

Markets remain in flux as investors balance domestic uncertainty in Japan, shifting oil dynamics, and global monetary policy expectations. While equities found support from a weaker yen, the broader outlook will hinge on who succeeds Ishiba and how fiscal strategy evolves. For now, the story of yen falls Japan stocks rise captures the delicate balance shaping market sentiment.

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