Nikkei Rises on Hopes of Continuing Abe’s Policies

Japanese stocks closed higher on Monday, August 31, recovering from heavy losses seen in the previous session, as concerns over the resignation of Prime Minister Shinzo Abe eased thanks to speculation that his potential successor will continue his current policies.

The benchmark Nikkei Index rose 1.12% to 23,139.76 points, and added 6.59% for the month, the biggest rise since May.

Nikkei fell 2.65% on Friday before closing down 1.41%, as Abe’s resignation on health grounds raised concerns about the future of fiscal and monetary stimulus. But local media reported that Cabinet Secretary Yoshihide Suga would join the race to succeed Abe, easing fears. A government headed by Suga may continue the fiscal and monetary stimulus put in place by the Abe government.

Jiji’s news agency reported that the ruling FDP will vote on September 14 to choose a new leader to succeed Abe.

The broader TOPIX index gained 0.83% to 1618.18 points.

The wholesale sector index topped the sectors’ gains on the main stock exchange, rising 4.52% with Warren Buffett’s Berkshire Hathaway acquisition of more than 5% stakes in Japanese trading companies.