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Japan Shares Up, Abe Successor May Go On Current Policies

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 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 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, up 6.06%, after Warren Buffett’s Berkshire Hathaway acquired more than 5% stake in five Japanese trading firms.

Marubeni jumped more than 12%, Sumitomo Corp climbed 11%, Mitsubishi Corp rose 9.75%, while Mitsui &Co and Itochu Corp 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 fell 3% after parent SoftBank Group Corp said it would sell up to 22% of the telco’s shares, which could slash its holding in the carrier to 40%.

(Reporting by Eimi Yamamitsu; editing by Uttaresh.V)

Source: Reuters

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