Japanese Stockmarket Enjoys a Suga Rush As PM Steps Down

The Japanese stock market has hit a 30-year high following the resignation of prime minister Yoshihide Suga.

Japanese stocks have hit a 30-year high following the resignation of prime minister Yoshihide Suga. Suga, who has only been in office for a year, had become widely unpopular as his government failed to get on top of a surge in Covid-19 infections. A slow vaccine rollout and the controversial decision to go ahead with hosting the Olympics despite the pandemic also sapped his support. He will step down before a general election scheduled for later this year. 

Japan’s Topix index reacted to the news by hitting its highest level since April 1991, says Bloomberg. Investors had once had high hopes for Suga, who vowed to accelerate Japan’s digital shift (see also page 28). In February this year the Nikkei 225 index hit the symbolic 30,000-level for the first time since 1990. Yet it fell back as Covid-19 came to dominate his premiership: “Suga had created an atmosphere of uncertainty… there was a perception that Japan was ‘in a mess’”, says Richard Kaye of Comgest Asset Management Japan.  The Topix has gained 6.5% during the past month alone.

In most countries investors dislike the uncertainty of an upcoming election, says Takeshi Kawasaki for Nikkei Asia. Not in Japan. “Looking at the ten early elections held since 1990, stocks rose nearly every time between the day of the lower house being dissolved and the election date”. 

What seems to happen is that headlines about Japanese politics grab the attention of foreign money managers. They decide they like what they see and buy. “Typically at the mercy of trends in US equities” thanks to Wall Street’s tendency to set the tone for world markets, Japanese stocks are likely to go their own way over the coming months.

By: Alex Rankine

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Critics:

The Tokyo Stock Exchange (東京証券取引所, とうきょうしょうけんとりひきじょ), abbreviated as Tosho (東証) or TSE/TYO, is a stock exchange located in Tokyo, Japan. It is the third largest stock exchange in the world by aggregate market capitalization of its listed companies, and the largest in Asia. It had 2,292 listed companies with a combined market capitalization of US$5.67 trillion as of February 2019.

The exchange is owned by the Japan Exchange Group (JPX), a holding company that it also lists (TYO: 8697). JPX was formed from its merger with the Osaka Exchange; the merger process begins in July 2012, when said merger was approved by the Japan Fair Trade Commission.[2] JPX itself was launched on January 1, 2013.

The TSE is incorporated as a kabushiki gaisha with nine directors, four auditors and eight executive officers. Its headquarters are located at 2-1 NihonbashiKabutochō, Chūō, Tokyo which is the largest financial district in Japan. Its operating hours are from 8:00 to 11:30 a.m., and from 12:30 to 5:00 p.m. From April 24, 2006, the afternoon trading session started at its usual time of 12:30 p.m..

Stocks listed on the TSE are separated into the First Section for large companies, the Second Section for mid-sized companies, and the Mothers section for high-growth startup companies, and the TOKYO PRO Market section for more flexible alternative investment. As of October 31, 2010, there are 1,675 First Section companies, 437 Second Section companies and 182 Mothers companies.

The main indices tracking the TSE are the Nikkei 225 index of companies selected by the Nihon Keizai Shimbun (Japan’s largest business newspaper), the TOPIX index based on the share prices of First Section companies, and the J30 index of large industrial companies maintained by Japan’s major broadsheet newspapers.

Ninety-four domestic and 10 foreign securities companies participate in TSE trading. See: Members of the Tokyo Stock Exchange

Other TSE-related institutions include:

  • The exchange’s press club, called the Kabuto Club (兜倶楽部, Kabuto kurabu), which meets on the third floor of the TSE building. Most Kabuto Club members are affiliated with the Nihon Keizai Shimbun, Kyodo News, Jiji Press, or business television broadcasters such as Bloomberg LP and CNBC. The Kabuto Club is generally busiest during April and May, when public companies release their annual accounts.

Market Movers

Constituents of the Nikkei 225 with the highest percent gain over one day.

ListingLastChangeVolume
Shinsei Bank Ltd8303:TYO1,968.00
JPY
+228.00
+13.10%
9.68m
Toho Zinc Co Ltd5707:TYO2,841.00
JPY
+130.00
+4.80%
805.10k
Isetan Mitsukoshi Holdings Ltd3099:TYO808.00
JPY
+35.00
+4.53%
2.68m
Hitachi Zosen Corp7004:TYO947.00
JPY
+32.00
+3.50%
3.45m
DeNA Co Ltd2432:TYO2,167.00
JPY
+72.00
+3.44%
709.60k
Kawasaki Kisen Kaisha Ltd9107:TYO6,380.00
JPY
+190.00
+3.07%
5.45m
Mitsubishi Chemical Holdings Corp4188:TYO1,040.50
JPY
+26.50
+2.61%
5.67m
Meiji Holdings Co Ltd2269:TYO7,260.00
JPY
+170.00
+2.40%
537.60k
Pacific Metals Co Ltd5541:TYO2,094.00
JPY
+44.00
+2.15%
596.40k
Mitsui Mining and Smelting Co Ltd5706:TYO3,590.00
JPY
+75.00
+2.13%
587.70k

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