Japanese Stocks Fall After PM Yukio Hatoyama’s Resignation
Japan’s stock market fell like a pack of cards as the investors failed to analyze the implications of Prime Minister Yukio Hatoyama’s resignation.
The prime minister stepped down from the post after he was alleged of failing to fulfill the campaign promises, especially one related to removal of American base from Okinawa.
As the trading day ended in Tokyo, the Nikkei 225 index slipped to 9,603.24 points, losing 1.1 per cent .
However, its currency managed to stay calm. The yen witnessed a modest gain early morning. As the day progresses, it reached to 91.4 yen against one dollar.
The currency had a little weakening, as it took 112.5 yen buy one euro. And then it weakened to 111.6 against the euro, barely changing from the period stock market panicked due to Hatoyama’s resignation.
Meanwhile, analysts are trying to develop a consensus on what kind of effect the resignation would have on the overall economy and others related to it.
Many believed that the resignation would help resolve the political crisis.
“The latest developments have raised hopes that the political morass that was seen as an impediment to the government’s economic policies may be cleared, which explains the various reactions of the markets,” Koichi Ono, senior strategist at Daiwa Securities Capital Markets in Tokyo, told reporters as the Nikkei 255 index arose after the resignation.
Other experts have also suggested that Hatoyama’s is unlikely to impact Japan’s ongoing economic reforms.
The other major stocks in the region gave a mixed reaction.
Singapore and Indian sensex saw nominal surge. But benchmark S&P/ASX 200 in Australia slumped by 0.7 per cent, Taiwan’s Taiex weakened by 1.3 pe rcent, China’s Shanghai composite index shed 1.5 per cent.
Japan’s ally South Korea stayed away from the turmoil, as the Korean market was closed for a public holiday.
It’s learnt that in spite of decline in major stock markets including the latest debt crisis, Asia has remained least affected. India and China have continued to grow, giving a ray of hope to the Japanese investors and experts.
