Japan Shares Reach 3-Decade High as PM Announces Stepping Down

Japanese stocks rose, while the broad Topix index reached its highest level in more than 30 years, after Prime Minister Yoshihide Suga tendered his resignation, paving the way for a new government that could help the ruling coalition win the upcoming elections.

The Nikkei index rose 2.04% to 29,128.11 points, its highest level since June 16, while the broader Topix index rose 1.61% to 2015,45, reaching levels not seen since April 1991.

For the week, the Nikkei gained 5.4%, the biggest gain since early November, when Joe Biden won the US presidential election.

Suga’s departure is seen as reducing the chance of the ruling coalition losing a stable majority in the upcoming House elections, which could be held by November.

Investors are also betting that Suga’s successor, whoever he is, is likely to deliver an economic package to support pandemic-hit companies and households ahead of the elections, providing a boost to stock prices.

Cyclical stocks such as steelmakers and stockbrokers, as well as semi-chip-related stocks, led the gains.