Japanese Stocks Poised to React to LDP Presidential Outcome โDespite Calls for โคunity
TOKYO, Sept 29 – The outcome of the โLiberal Democratic Party (LDP) presidential election is injecting uncertainty into Japaneseโฃ stock markets, even as leading figures emphasize the need for โparty unity. Analysts predict varying degrees of market response depending on whether Taro Kono or Sanae Takaichi wins the leadership contest,with potential impacts ranging from modest adjustments to a important rally.
The election’s importance extends beyond domestic politics, influencing investor sentiment and potentially shaping Japan’s economic trajectory. A shift in leadership could signal changes in monetary policy, fiscal spending, andโข structural reforms – all โfactors keenlyโฃ watched by both domesticโ and international investors. โThe stakes are high,โค with trillions of yen on the line as markets anticipate the next phase of Japan’s economic recovery. The new LDPโฃ president will likely become the next Prime Minister, setting the course for Japan’s economic policy for the foreseeable future.
Resona Holdings strategist Takei Daiki suggests that if Sanae Takaichi โprevails, the stock market could see โคa boost, potentially reaching 46,000 yen. He โnotes that current stock prices have already โundergone some adjustment from theirโข highs, creating roomโ for further gains.
Conversely, expectations are for a more muted market reaction should Taro Konoโค win.Daiwa Securities’ Tsuboi believes that while โstocks frequentlyโฃ enough decline following โคa Kono victory, “adjustments are โฃbeing made ahead of the line, so the โdownward push problably won’t be much stronger,” โฃgiven that adjustment โขrisksโค were already factored into high stock prices.
Takei further contends that the optimistic outlook for a potential U.S. rate โฃcut is limiting downside risk. He โขestimates a potential lower price of around 43,500 yen,calculated at 15.5 times the upper limit of the central range for the price-earnings ratio (PER) over the past few years.