Japan’s new prime minister rattles the markets
Investors appear unimpressed with Fumio Kishida, the man chosen to succeed Yoshihide Suga as Japan’s prime minister.
Investors appear unimpressed with Japan’s new leader. The ruling party has chosen Fumio Kishida to replace Yoshihide Suga as the head of the world’s third-biggest economy. Kishida was the continuity candidate.
That means more loose fiscal and monetary policy, “decarbonisation, digitalisation” and the “promotion of free trade”, says Ma Tieying of DBS. The new government is preparing to launch yet another stimulus package, worth at least 5.5% of GDP. Happily, Covid-19 is back under control in Japan, with vaccination rates now exceeding those in the US. Japanese stocks rallied in September when Suga announced his resignation, say Toshiro Hasegawa and Gearoid Reidy on Bloomberg. There was hope that Japan could turn the page on a difficult year. It is a measure of just how “uninspiring” investors find Kishida that the benchmark Topix index has since given back all of their post-Suga gains.
Kishida has got off to a bad start with investors, say Leo Lewis and Kana Inagaki in the Financial Times. This week he suggested that he could increase Japan’s capital-gains tax. The resulting selloff, dubbed the “Kishida shock”, sent the Topix down by 3% on Tuesday. Higher taxes would mark a “sharp reversal” from the pro-investment line taken by Tokyo since 2013.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Japanese investors aren’t that gloomy, say Hideyuki Sano and Tom Westbrook on Reuters. The country’s shares outperformed both the US and Europe last month. A better Covid-19 picture and improved corporate earnings outlook also bode well. Supporters view Kishida as “a steady consensus-builder”, but many doubt he can see through overdue structural changes to Japan’s “old-fashioned” bureaucracy. He will face the voters in a general election at the end of this month.
-
Copycat banking websites on the rise - how to spot one
Over 2,000 banking copycat websites were reported as phishing scams in 2023, according to Which? But how do you know if the banking site you're about to use is real?
By Oojal Dhanjal Published
-
Saving for retirement: ISAs vs. SIPPs
Features SIPPs offer more generous tax breaks overall, but ISAs are more flexible. So, which is better?
By Marc Shoffman Last updated
-
What to consider before investing in small-cap indexes
Small-cap index trackers show why your choice of benchmark can make a large difference to long-term returns
By Cris Sholto Heaton Published
-
Why space investments are the way to go for investors
Space investments will change our world beyond recognition, UK investors should take note
By Merryn Somerset Webb Published
-
Time to tap into Africa’s mobile money boom
Favourable demographics have put Africa on the path to growth when it comes to mobile money and digital banking
By Rupert Hargreaves Published
-
M&S is back in fashion: but how long can this success last?
M&S has exceeded expectations in the past few years, but can it keep up the momentum?
By Rupert Hargreaves Published
-
The end of China’s boom
Like the US, China too got fat on fake money. Now, China's doom is not far away.
By Bill Bonner Published
-
Magic mushrooms — an investment boom or doom?
Investing in these promising medical developments might see you embark on the trip of a lifetime.
By Bruce Packard Published
-
What pension providers don't tell you about your retirement money
Check the small print from your pension provider or risk losing thousands.
By Merryn Somerset Webb Published
-
Should you invest in sector funds?
Sector funds can be a useful way to fine-tune a portfolio or track a theme, but check what the index holds.
By Cris Sholto Heaton Published