Japan's Nikkei rose 1.5% in early trading after shedding 4.8% on Monday as investors contended with perceived monetary policy hawk Shigeru Ishiba winning a contest to become the country's prime minister.
Some analysts pointed out that the Japan market has been seen as the "anti-China trade" against geopolitical tensions. In that sense, the blistering rally in Chinese market could turn out to be a headwind.
The election result means the BOJ "will not face any political hurdle for hiking rates further." According to Sumitomo Mitsui Banking Corporation. A stronger yen puts pressure on exporters. In a sign of the effect, Japan's export growth slowed sharply in August as shipments to the US dropped for the first time in three years, while machinery orders unexpectedly shrank in July.
Industrial production declined more than expected in August, with uncertainties over the global economy further clouding the outlook for the country's manufacturing sector.
The Nikkei index has been highly volatile last month amid concerns about central bank decision and political turmoil. Higher high and higher low indicate that uptrend will continue, with resistance seen around 40,000.
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