Japan to Call General Election On October 27, Yen Rallies and the Nikkei 225 Plunges 4%

Akira Ito
30 Sep, 2024
Tokyo

Stock market indexes in Tokyo plunged following the announcement of the new leader of the ruling Liberal Democratic Party. 

The Nikkei 225 stock average and the Topix index jumped as much as 5%, and investors overlooked the latest updates on retail sales and industrial production data. 

Former defense minister Shigeru Ishiba won the tightly contested leadership race by nine candidates, garnering more votes than the run-off rival Sanae Takaichi, setting the stage for the premiership of Japan. 

The newly elected party leader also expressed his plan to hold a general election as early as October, and Ishiba in the past has supported more hawkish monetary policy. 

"I believe it is important for the new administration to be judged by the people as soon as possible," and added, "we would like to hold a general election on October 27," Ishiba said at an LDP news conference.

The party is expected to confirm his nomination as the next prime minister at the Diet session on Tuesday. 

The Japanese yen soared to 141.7 against the U.S. dollar, dampening the stock market sentiment. 

On the economic front, Japan's annual retail sales growth slightly accelerated to 2.8% in August from 2.7% in July, the Ministry of Economy, Trade & Industry reported. 

Retail sales increased for the 29th month in a row, supported by the increase in wages, which continue to support higher consumption of basic items. 

On a monthly basis, retail sales accelerated to an increase of 0.8%, after sales rose 0.2% in July. 

Japan's industrial production declined 3.3% from the previous month in August, the fifth monthly decline in 2024, the ministry said in a separate report. 

From the previous year, industrial production declined 4.9%, marking the sixth decline in 2024 and reversing the 2.9% increase in July. 

 

Japan Stock Movers

The Nikkei 225 Stock Average declined 5% to 37,826.07 and the Topix index dropped 3.6% to 2,641.68. 

Tech stocks led the decliners in Tokyo, and semiconductor-related stocks were the worst hit. 

Advantest Corp. fell 6.5% to ¥6,741.0, Tokyo Electron declined 8% to ¥25,290.0, and Lasertec dropped 10% to ¥23,605.0. 

Seven & I Holding declined 3.2% to HK ¥2,146.50, Fast Retailing decreased 3.4% to ¥47,420.0, and Isetan Mitsukoshi plunged 10.5% to ¥2,226.0. 

Toyota Motor decreased 7.6% to ¥2,542.50, Honda Motor declined 7% to ¥1,507.50, and Nissan Motor fell 6% to ¥402.50. 

Marubeni declined 3% to ¥2,340.0, Itochu Corp. fell 3.3% to ¥7,678.0, Mitsui & Company decreased 2.8% to ¥3,178.0, and Mitsubishi eased 4.2% to ¥2,952.50. 

Sumitomo Mitsui Financial gained 3% to ¥3,045.0, Mitsubishi UFJ Financial advanced 0.2% to ¥1,453.50, and Mizuho Financial gained 4.2% to ¥2,936.0.