Nikkei increased by 1.5% after the prime minister’s statement, which followed weeks of growing pressure due to his national election defeat late last year. Asia-Pacific markets experienced a predominantly positive session on Monday as investors evaluated the resignation announcement of Japan’s Prime Minister Shigeru Ishiba over the weekend, while also focusing on significant economic data in the region.

Koizumi Shinjiro, is a probable candidate for leadership, according to a note from Stefan Angrick. At the same time, Takaichi Sanae stands out as a significant candidate. Richard Kaye noted that the market’s response on Monday was unexpectedly positive, reflecting the enthusiasm surrounding Koizumi and Takaichi. Kaye highlighted that the possible successor Takaichi, who advocates for deregulation and is opposed to interest rate increases, is “likely the candidate to drive growth and she will justify today’s market rally.” The Japanese yen declined 0.64% to 148.33 versus the US dollar, as Japanese bonds experienced ongoing selling pressure. Japan’s 30-year bond yield increased by over 4 basis points to 3.272%, following a record high achieved last Wednesday, and has surged more than 100 basis points this year. The yield on the 20-year debt stands at 2.676%, reflecting an increase of over 3 basis points.

Japanese government bond yields are reaching new peaks as investors factor in ongoing inflation, stricter monetary policy, and fiscal uncertainty. “Japan is now poised for a phase of prolonged uncertainty as we approach Q4 2025,” stated by analysts. “While the next leader of the LDP would typically assume the role of prime minister, there exists a theoretical scenario where the opposition could unite behind an alternative candidate for the premiership.” South Korea’s Kospi increased by 0.15%, and the small-cap Kosdaq rose by 0.47%. Hong Kong’s Hang Seng index increased by 0.23%, whereas the mainland’s CSI 300 decreased by 0.3% following a 4.4% rise in China’s August exports in U.S. dollar terms compared to the previous year, falling short of economists’ expectations for a 5.0% increase. Imports experienced slower growth than anticipated, influenced by the ongoing real estate downturn, increasing job insecurity, and various other factors. Australia’s benchmark index experienced a decline of 0.38%.

Oil prices edged up following OPEC+’s announcement over the weekend regarding an increase in oil production beginning in October, although the group is moderating the rate of increases. During an online meeting on Sunday, eight OPEC+ members reached a consensus to increase production by 137,000 barrels per day beginning in October. This figure is significantly lower than the increases of approximately 555,000 bpd in September and August, as well as 411,000 bpd in July and June. Global benchmark Brent increased by 0.53% to $62.2 a barrel, while U.S. West Texas Intermediate futures rose by 0.6% to $65.89 per barrel. U.S. stock futures showed minimal movement on Sunday as investors prepare for a week packed with significant data, featuring two key reports on inflation. The producer price index report for August is set to be released on Wednesday morning in the U.S., with the consumer price index following on Thursday.

Last Friday in the U.S., all three major averages ended the day in the red following a disappointing jobs report that raised concerns about an economic slowdown, despite growing anticipation for a Federal Reserve rate cut. The S&P 500 closed lower by 0.32% at 6,481.50, and the Nasdaq Composite saw a slight decrease of 0.03%, ending at 21,700.39. The Dow Jones Industrial Average finished the day lower by 220.43 points, which is a decline of 0.48%, settling at 45,400.86. All three major indexes achieved new record intraday highs earlier in Friday’s session. At their highest points, the broad market index, the tech-focused Nasdaq, and the blue-chip Dow showed increases of approximately 0.5%, 0.8%, and 0.3%, respectively.