EconomyMarkets

Japan’s investors raise bets on Kono in leadership race By Reuters

© Reuters. FILE PHOTO: Taro Kono, Japan’s vaccination programme chief and ruling Liberal Democratic Party (LDP) lawmaker, attends a news conference as he announces his candidacy for the party’s presidential election in Tokyo, Japan, September 10, 2021. REUTERS/Issei

By Hideyuki Sano

TOKYO (Reuters) – Japan’s stock investors have raised bets Taro Kono will become the country’s next prime minister, snatching up renewable energy and office technology shares that are expected to benefit under his economic policies.

At the same time, investors are now trimming holdings of some medical service shares that had previously benefited on now fading expectations former foreign minister Fumio Kishida, an advocate of spending in that sector, could succeed outgoing Prime Minister Yoshihide Suga.

Weekend polls showed vaccine minister Kono emerging as a strong favourite to become the next leader of the ruling Liberal Democratic Party, and therefore prime minister, well ahead of Kishida and former defence minister Shigeru Ishiba.

While there are few specific details about each candidate’s economic platforms, investors are nonetheless positioning themselves ahead of the Sept. 29 LDP vote.

“Some foreign investors are buying Japanese stocks on Kono hopes,” said Hiroyuki Ueno, senior strategist at Sumitomo Mitsui (NYSE:) Trust Asset Management. “But his economic policies are still not that clear, including his stance on the Bank of Japan’s monetary policy, so there is a risk markets may get disappointed.”

Kono is known as a critic of nuclear power and investors expect him to promote a further shift to renewable energy given Japan last year adopted a carbon neutral goal.

His improved political prospects since the start of the month have pushed renewable energy firm Renova up 47% over that period while rival West Holdings has gained 26%, easily beating 6.5% gains in the broad index.

LDP leadership race and Japan stocks https://fingfx.thomsonreuters.com/gfx/mkt/klvykgkelvg/21913B.png

Similarly, Kono, as administrative reform minister, has spearheaded efforts to abolish the use of “hanko” seals, personal signature stamps traditionally used for managerial approval and seen as a symbol of Japanese corporate inefficiency.

His improved chances supported firms that provide document digitalisation services. Bengo4.com, which offers electronic contract service, has risen 8.4% so far this month while GMO GlobalSign, a web certificate service firm, added 9.7%.

Kishida’s chances were undermined after former Prime Minister Shinzo Abe, one of his main backers, switched his support to lesser-known former home affair minister Sanae Takaichi.

Kishida has pledged to expand the country’s medical capacity to deal with the COVID-19 outbreak so his candidacy and initially strong support helped shares in that sector.

However, his subsequent loss of momentum has hit those shares with Leoclan, a medical equipment trading firm, shedding some of its gains of more than 20%. MRT, which offers web-based staffing service for doctors and hospitals, also lost steam.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Source link

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button