Japan shares jump on hopes Abe successor may continue current policies

Credit: REUTERS/ISSEI KATO

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.

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%.

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

((eimi.yamamitsu@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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