Global shares rise after Japan's prime minister announces plan to resign

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TOKYO (AP) — Global shares mostly rose with Japan's benchmark jumping higher in Monday morning trading, despite the looming political uncertainty after Prime Minister Shigeru Ishiba announced last night that he plans to resign.

France's CAC 40 edged up nearly 0.2% in early trading to 7,688.69, while Germany's DAX rose 0.6% to 23,742.28. Britain's FTSE 100 added 0.2% to 9,224.85. U.S. shares were set to drift higher with Dow futures up 0.2% at 45,530.00. S&P 500 futures rose 0.2% to 6,504.50.

Analysts said Ishiba's announcement was expected for some time and welcomed it as moving things forward, although uncertainty remains as the ruling Liberal Democratic Party will need to hold an election to choose a new leader. Ishiba will remain prime minister until his successor is chosen and approved by parliament.

“Markets may react short-term to the temporary uncertainty of lame-duck leadership, but this may resolve once a new leader is chosen. Meanwhile, the LDP’s position as a minority leading party is unlikely to change anytime soon, and as such compromise will be the name of the policy-making game,” said Naomi Fink, chief global strategist at Amova Asset Management.

Japan's benchmark Nikkei 225 gained 1.5% to finish at 43,643.81. South Korea's Kospi gained 0.5% to 3,219.59. Australia's S&P/ASX 200 lost 0.2% to 8,849.60.

Hong Kong's Hang Seng edged up 0.9% to 25,633.91, while the Shanghai Composite rose 0.4% to 3,826.84.

Also Monday, Japan's Cabinet Office said the economy expanded at a stronger rate in the fiscal first quarter than previously estimated, at a seasonally adjusted 2.2% annualized rate, better than the earlier 1.0% rate as solid consumer spending and inventories lifted growth more than previously thought.

Japanese auto stocks rallied after the U.S. finalized a trade deal with Japan. Tariffs on Japanese autos surged to 15% from the initial 2.5%, considerably lower than the 27.5% initially discussed.

Toyota stock gained 0.3%, while Nissan stock rose 2.4%. Subaru issues added 1.3%, while Mitsubishi Motors edged up 1.2%.

“The Bank of Japan remained in focus as strong wage data increased expectations for a potential rate hike later this year,” said Bas Kooijman at DHF Capital SA, noting that wages were rising.

In energy trading, benchmark U.S. crude added $1.06 to $62.93 a barrel. Brent crude, the international standard, rose $1.14 to $66.64 a barrel.

In currency trading, the U.S. dollar edged up to 147.70 Japanese yen from 147.39 yen. The euro cost $1.1733, inching up from $1.1723.

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Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama