Asian stocks climb as Yen weakens on Japan PM's resignation

Asian equities advanced Monday, with Tokyo leading gains after Japanese Prime Minister Shigeru Ishiba announced his resignation, sending the yen lower and lifting exporters.

The Nikkei 225 rose 1.9% as the yen weakened to 148.14 per dollar from 147.07 on Friday. Japanese government bond yields also climbed, reflecting renewed uncertainty for the world’s fourth-largest economy. Ishiba’s decision to step down after less than a year in office had been speculated, but the timing surprised markets.

“This obviously introduces significant downside risks for the yen and for long-end Japanese government bonds,” said Michael Brown, senior strategist at Pepperstone. He added that Ishiba’s potential successors are likely to pursue looser fiscal policies, which could further weigh on bond demand.

Elsewhere in the region, Hong Kong and Shanghai rose 0.3%, Taipei gained 0.5%, and Seoul added 0.3%. Singapore and Wellington edged up 0.1% each, while Sydney slipped 0.3%.

Investors were also weighing soft U.S. labor data, which reinforced expectations the Federal Reserve will cut interest rates this month. “Rising expectations of Fed rate cuts and with that lower U.S. yields should provide some breathing space for Asian central banks,” said Michael Wan of MUFG. He cautioned, however, that a sharp U.S. slowdown remains a risk for Asian exports.

Oil prices climbed after eight OPEC+ members agreed to further boost production, while Japanese bond yields continued to rise following record highs last week.

Key figures at around 0200 GMT

Tokyo - Nikkei 225: UP 1.9 percent at 43,816.02
Hong Kong - Hang Seng Index: UP 0.3 percent at 25,499.10
Shanghai - Composite: UP 0.3 percent at 3,825.83
Euro/dollar: DOWN at $1.1711 from $1.1722 on Friday
Pound/dollar: DOWN at $1.3501 from $1.3508
Dollar/yen: UP at 148.14 yen from 147.07 yen
Euro/pound: DOWN at 86.75 pence from 86.77 pence
West Texas Intermediate: UP 1.3 percent at $62.66 per barrel
Brent North Sea Crude: UP 1.3 percent at $66.32 per barrel
New York - Dow: DOWN 0.5 percent at 45,400.86 (close)
London - FTSE 100: DOWN 0.1 percent at 9,208.21 (close)