Kono Win in LDP Election Likely To Push Tokyo Stocks Higher

While anticipation of a new government has already lifted Tokyo stocks to their highest level in 31 years, many analysts think a victory by vaccination minister and pro-reform Taro Kono in the Sept. 29 ruling party leadership election will send share prices even higher, Yuka Nakao reported for Kyodo News.

Photo Insert: Taro Kono doubles as administrative reform minister.

The 225-issue Nikkei Stock Average has surpassed the 30,000 mark and moved at its highest level since the Japanese economy experienced an asset-inflated bubble following Prime Minister Yoshihide Suga's decision to resign amid plunging support rates.

The new Liberal Democratic Party leader, to be chosen from among Kono, former Foreign Minister Fumio Kishida, former communications minister Sanae Takaichi and former gender equality minister Seiko Noda, will also be the next prime minister as the party controls the House of Representatives, the more powerful chamber of parliament.

Shares surged even before all contenders announced their bids, mainly because Suga's planned departure reduced the risk of the LDP losing a large number of seats in the lower house election scheduled to be held after the party leadership race, brokers said.

Some fear that a loss by the ruling party in the general election could result in uncertainties about political stability and economic packages that the government had worked on to cushion the impact on the economy from the COVID-19 pandemic.

Investors are now buying on hopes of changes with a possible fresh stimulus to be compiled by Suga's successor who many believe will have a higher approval rate, the brokers said.

Many analysts said Kono, who doubles as administrative reform minister, is the market favorite and hopes that his popularity may lead the LDP to win the lower house election. Savvy about social media, the Georgetown University graduate is the No. 1 pick in some media polls.

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