Nikkei Falls as Japan’s Prime Minister to Resign

Japanese stocks fell by the most in nearly a month on news that Japanese Prime Minister Shinzo Abe will resign, putting an abrupt end to a stable government and policy mix of strong monetary and fiscal stimulus.

The benchmark Nikkei index fell 2.65% during the session before closing 1.41% lower at 22,882.65 points.

Reuters reported, citing a source close to an official in the ruling party, that Abe, who has held the post for the longest period in the country, is due to resign due to his deteriorating health after taking office for about eight years.

And a strong stimulus implemented by Abe and his close cooperation with the central bank contributed to the revitalization of Japanese stocks, as the Nikkei index reached its highest level in 27 years in 2008.

The broader TOPIX index lost 0.68% to 1604.87 points, while the value of trades rose to the highest level in more than two months at 2.825 trillion yen (26.60 billion dollars).

Growth stocks lost 1.21% while value stocks nearly stabilized, as investors bought financial stocks and other declining value stocks following the Federal Reserve’s (US Central Bank) new long-term policy strategy to allow inflation to rise.

Dai-ichi Life jumped 4.4% , while T&D Holdings gained 4.2%. Among banks, Mizuho added 1.6%, Sumitomo Mitsui Trust gained 3.2%, and Sumitomo Mitsui Financial gained 2.2%.

On the other hand, investors sold shares of technology companies and others that have performed strongly recently to take profits.

Sony and Softbank Group fell 3.3% each. Medical support operator M3 slipped 5%, while chipmaker Tokyo Electron fell 3.5%.