Japan's stock market was down, though not sharply, after Shinzo Abe, prime minister, told a news conference on Wednesday he was resigning.
Ahead of the official announcement, reports in the Japanese media that Mr Abe intended to resign snuffed out a mild intraday rally in the Nikkei, which minutes afterward was trading at 15,804.27, down 0.5 per cent on the day. The broader Topix also lost earlier gains, to trade at 1,530.14 - down 0.2 per cent on the day.
The muted reaction - at least so far - of financial markets reflects a widespread assumption among analysts that Mr Abe would not last much longer as premier, since he had been struggling for political survival after the resounding defeat of his Liberal Democratic Party in July's elections for parliament's upper house.
Taro Aso, foreign minister and a right-winger like Mr Abe, is seen as Mr Abe's most likely replacement.
A global strategist based in Tokyo said financial markets had not reacted much because "people are assuming the new prime minister will be Aso, who will not be wildly different".
The strategist added that western investors had long since given up on hopes Mr Abe might introduce reforms into the Japanese economy and capital markets that would boost share prices. He said this, too, helped to explain why markets did not react dramatically to the resignation.
A Japanese equities strategist said foreign investors would react favourably if the rather stolid Mr Abe was replaced by his maverick reformist predecessor, Junichiro Koizumi - a scenario periodically mooted by the Japanese media. He said: "I doubt if Koizumi's going to come back, but you really need someone like that who is a bit of an outsider and ready to take some risk."
The news spurred a small shift out of Japanese government bonds, indicating mild but not extreme negative sentiment towards Japan. The yield on the benchmark 10-year JGB was up 1.5 basis points on the day at 1.550 per cent.
The yen edged down slightly in value against the dollar, to Y114.3 from Y114.1.
Ahead of the official announcement, reports in the Japanese media that Mr Abe intended to resign snuffed out a mild intraday rally in the Nikkei, which minutes afterward was trading at 15,804.27, down 0.5 per cent on the day. The broader Topix also lost earlier gains, to trade at 1,530.14 - down 0.2 per cent on the day.
The muted reaction - at least so far - of financial markets reflects a widespread assumption among analysts that Mr Abe would not last much longer as premier, since he had been struggling for political survival after the resounding defeat of his Liberal Democratic Party in July's elections for parliament's upper house.
Taro Aso, foreign minister and a right-winger like Mr Abe, is seen as Mr Abe's most likely replacement.
A global strategist based in Tokyo said financial markets had not reacted much because "people are assuming the new prime minister will be Aso, who will not be wildly different".
The strategist added that western investors had long since given up on hopes Mr Abe might introduce reforms into the Japanese economy and capital markets that would boost share prices. He said this, too, helped to explain why markets did not react dramatically to the resignation.
A Japanese equities strategist said foreign investors would react favourably if the rather stolid Mr Abe was replaced by his maverick reformist predecessor, Junichiro Koizumi - a scenario periodically mooted by the Japanese media. He said: "I doubt if Koizumi's going to come back, but you really need someone like that who is a bit of an outsider and ready to take some risk."
The news spurred a small shift out of Japanese government bonds, indicating mild but not extreme negative sentiment towards Japan. The yield on the benchmark 10-year JGB was up 1.5 basis points on the day at 1.550 per cent.
The yen edged down slightly in value against the dollar, to Y114.3 from Y114.1.
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