Japan Prime Minister Yoshihide Suga has announced not to seek re-election as ruling-party leader last week, marred by a sinking approval rating partly due to a perceived inadequacy for his Covid-19 responses. The race is therefore on to find the next successor, with less than a month to go before the party’s leadership appointment on 29 September. Based on an opinion poll conducted by Kyodo News, the top contender thus far is Taro Kono, Japan’s Covid-19 vaccine minister, with a 31.9% approval rating. This is followed by Shigeru Ishiba, who came in second with a 26.6% rating. The potential views of some of the key contenders are summarized below.
While public opinions are important, the contenders also need to seek factional support, which seems highly uncertain now. Highly watched factions, such as the Shikōkai and Hosoda factions, are yet to commit to their candidate of choice and the rally for support is expected to be highly watched over the coming weeks.
As Suga’s rising unpopularity partly stems from the perceived inability on his part to manage the Covid-19 pandemic, the new prime minister will seek to address this issue. This seems to bring high hopes of further economic stimulus to aid businesses and bolstering of healthcare systems to tackle elevated Covid-19 cases. There may be some resistance with Japan’s government debt at 256% of GDP, but with ultra-low rates and the Bank of Japan (BoJ) holding more than half of all government bonds, the elevated debt may seem less of a problem. Other standpoints under a new leadership may remain largely unchanged, with Japan’s monetary policies on hold and the tougher stance towards China to continue.
On the Index front, Nintendo Co., Keyence Corp., and Murata Manufacturing Co. It will be included in Japan’s Nikkei 225 Index, while Nisshinbo Holdings Inc., Toyo Seikan Group Holdings, and Sky Perfect JSAT Holdings Inc will be excluded from the index.
In the statement made, it was reported that the three companies added to the index will start trading in the index as of October 1.
This long-awaited development comes after changes that allowed Nikkei to regulate high-priced stocks.
Earlier this year, Nikkei announced changes to its methodology to modernize the index and enable companies like Nintendo to participate in the index.
Like the Dow Jones Industrial Average, the Nikkei 225’s methodology has been criticized because its price-weighted nature makes it more prone to wild swings in stocks with higher prices.
That’s changed with Nikkei Inc. ’S latest revisions. The changes capped the impact of firms with high share prices on the benchmark’s weighing upon their introduction.
As passive funds tracking the index need to buy and sell to reflect the changes, Nikkei 225 changes are reliable events for volatility. Shares frequently surge after addition to the gauge, with Nexon Co. Rising 17% last October the day after its addition.
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