HONG KONG — Asian markets got off to a wild start to the week, with Tokyo’s Nikkei 225 index plunging nearly 5%, while Chinese markets soared on news of new stimulus measures for the flagging economy.
Japanese shares fell after the ruling Liberal Democrats chose former Defense Minister Shigeru Ishiba to succeed Prime Minister Fumio Kishida, who will step down on Tuesday.
Ishiba has expressed support for the Bank of Japan’s moves to raise interest rates from near-zero levels. He also supports other policies, such as a possible corporate tax hike, that are seen as less market-friendly than his main rival for the top position, Economic Security Minister Sanae Takaichi, whom he defeated in the runoff vote on Friday evening.
The Nikkei was 4.7% lower on Monday afternoon at 37,956.32.
The dollar fell from more than 146 yen to less than 143 yen after the ruling party’s vote ended late Friday. By mid-Monday, it was trading at 142.49 yen, up from 142.29.
Exporters’ shares fell as a stronger yen is a disadvantage for Japanese companies that generate a large part of their turnover and profits abroad.
Toyota Motor Corp. fell 3.5%. The shares of Honda Motor Co. fell by 4.1% and those of Nissan Motor Co. by 5.8%.
Ishiba has said he supports Kishida’s “new capitalism” policies, which would ostensibly promote a more equal distribution of national wealth. But sharply rising prices have undermined progress in encouraging consumers to spend more.
Meanwhile, Hong Kong’s Hang Seng rose 3.3% to 21,321.97, while Hong Kong’s Hang Seng Mainland Properties Index rose 8.6%. The Shanghai Composite index rose 5.7% to 3,263.59.
The meetings were conveniently timed and took place on the eve of a week-long national holiday marking 75 years of communist rule in China. Markets in mainland China are closed from Tuesday to October 7.
China is moving forward with measures announced last week to support the real estate sector and revive flagging financial markets. The central bank announced on Sunday that it would order banks to reduce mortgage rates on existing home loans by October 31. Meanwhile, the major southern city of Guangzhou lifted all restrictions on home purchases this weekend, while both Shanghai and Shenzhen unveiled plans to ease mortgage rates. most important purchasing barriers.
The effort to lift the housing market out of a prolonged downturn comes as the economy shows signs of further slowdown. China’s manufacturing activity contracted for a fifth straight month in September, while the official purchasing managers’ index stood at 49.8, remaining below the 50 line that separates growth from contraction, according to National Bureau of Statistics data released Monday.
Elsewhere in Asia, the Australian S&The P/ASX 200 rose 0.7% to 8,273.10. South Korea’s Kospi fell 0.9% to 2,627.13.
On Friday the S&The P500 fell 0.1% from its value highest ever to 5,738.17. The Dow Jones Industrial Average rose 0.3% to 42,313.00, setting its own record, while the Nasdaq index fell 0.4% to 18,119.59.
Treasury yields fell in the bond market after a report showed inflation slowed in August slightly more than economists expected. It repeated similar figures earlier in the month on inflation, but Friday’s report has resonance because it is the benchmark Federal Reserve officials prefer to use.
In the hope of this, the Fed kept its key interest rate at its highest level in twenty years for more than a year slowing down the economy enough to drive inflation towards the 2% target. Now that inflation has decreased significantly peak two summers agothe Fed did that started lowering rates to ease conditions for the slowing labor market and prevent a recession.
The risk of a recession remains, and so do American employers slowed their recruitment. An inflation report on Friday showed that US consumer spending growth in August fell short of economists’ expectations.
In other trades Monday, U.S. crude added 40 cents to $68.58 a barrel. Brent crude, the international standard, rose 45 cents to $71.99 a barrel.
The euro traded at $1.1158, down from $1.1163.