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Japan shares jump on hopes Abe successor may continue current policies

Published 08/31/2020, 11:31 AM
Updated 08/31/2020, 11:40 AM

TOKYO, Aug 31 (Reuters) - Japanese shares bounced back on
Monday, recovering from sharp losses seen in the previous
session, as concerns about Prime Minister Shinzo Abe's
resignation were tempered by speculation that his possible
successor could continue his current policies.
The benchmark Nikkei share average .N225 jumped 1.95% to
23,329.47 by the midday break, with 216 advancers on the index
against 8 decliners.
The Nikkei had closed 1.41% lower on Friday, after dropping
as much as 2.65%, as Abe's abrupt resignation for health reasons
increased investors' wariness about future fiscal and monetary
stimulus policies.
But local media reports that said Chief Cabinet Secretary
Yoshihide Suga, Abe's close ally, would join the race to succeed
him calmed nerves. A Suga government could extend the fiscal and
monetary stimulus that defined the Abe regime. A slimmed-down leadership contest will likely be around
Sept. 13 to Sept. 15.
The broader Topix .TOPX gained 1.83% to 1,634.27, with all
33 sector sub-indexes on the Tokyo exchange trading higher.
Aiding sentiment was a surge in wholesales index .IWHOL.T ,
up 6.06%, after Warren Buffett's Berkshire Hathaway BRKa.N
acquired more than 5% stake in five Japanese trading firms.
Marubeni 8002.T jumped more than 12%, Sumitomo Corp
8053.T climbed 11%, Mitsubishi Corp 8058.T rose 9.75%, while
Mitsui &Co 8031.T and Itochu Corp 8001.T added 8.44% and
5.83%, respectively.
Meanwhile, Japan's factory output rose in July at the
fastest pace on record, driven by automobiles and car parts,
indicating a gradual economic recovery from the COVID-19
pandemic. Among other shares, wireless carrier SoftBank Corp 9434.T
fell 3% after parent SoftBank Group Corp 9984.T said it would
sell up to 22% of the telco's shares, which could slash its
holding in the carrier to 40%.

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