Shinzo Abe announced his resignation, the yen depreciated, and Japanese stocks saw a slight pump.

Japanese Prime Minister Shigeru Ishiba announced his resignation, stating at a press conference in Tokyo on Sunday: "After witnessing the progress of the U.S. trade negotiations, I believe now is the best time to step down and make way for my successor." On Monday, the further unstable risks put pressure on the yen during the Asian early session. The dollar rose above 148 against the yen, while the Japanese stock market benefited from the yen's depreciation and experienced an increase.

The Japanese yen depreciates, the Japanese stock market experiences a slight pump, and long-term bonds face pressure.

In the Asian morning session on Monday, further unstable risks put pressure on the yen. The dollar rose 0.7% against the yen, breaking past 148, while the Japanese stock market, benefiting from the yen's depreciation, saw an increase.

In light of increasing concerns about government spending, long-term Japanese sovereign bonds are particularly vulnerable to sell-offs. Last week, the yield on long-term Japanese government bonds reached a new high in decades.

Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management, believes that Japan's long-term bond yields may face upward pressure:

"Prime Minister Ishiba is known for his strict fiscal discipline. While it is currently unclear who will become the next prime minister, it is hard to imagine anyone's stance on fiscal discipline being better than his, or even comparable to it."

Takashi Saimai and Shinjiro Koizumi are popular candidates.

The Liberal Democratic Party was originally scheduled to hold a vote on Monday to decide whether to move up the presidential election by two years. Shigeru Ishiba stated that this vote will now be canceled, and the LDP will instead hold a presidential election. Legislators vying for the position of the next prime minister need the support of at least 20 other lawmakers to participate in the race.

Potential candidates within the ruling party include former Minister of Internal Affairs and Communications Sanae Takaichi, who ranked second last year in the Liberal Democratic Party presidential election, just behind Shigeru Ishiba. She supports stimulus measures and may hope for a more cautious approach from the Bank of Japan regarding interest rate hikes.

Former Prime Minister's son and Minister of Agriculture, Forestry and Fisheries Shinjiro Koizumi may also join the competition, as he might bring a more innovative image to the Liberal Democratic Party, thereby winning broader public support. Shinjiro Koizumi met with Shigeru Ishiba on Saturday and urged him to step down.

Other potential candidates include former Minister of Economic Security Takashi Kobayashi, who belongs to the right wing of the party and may compete with Koizumi in seeking support from right-wing lawmakers. Current Chief Cabinet Secretary Yoshihide Suga may also run.

Shinzo Abe stated that he will continue to serve as Prime Minister until his successor takes over. His departure may exacerbate investors' uncertainty in the coming weeks until a new leader is elected - according to local media reports, the new leader may be chosen in early October.

The next prime minister will face economic challenges.

The next Prime Minister will have to face a series of challenges, from global trade headwinds to domestic discontent brewing due to soaring prices. Shigeru Ishiba has called for new cash subsidies to support consumers, while the opposition seeks tax cuts or increased spending, proposals that have raised concerns among investors.

Last Thursday, U.S. President Trump signed a trade agreement with Japan and made it effective through an executive order. Although the new executive order will lower the current tariff rates, Japan will still have to pay a maximum tariff of 15% on its products ( including exports of cars and auto parts ).

This article announces Shigeru Ishiba's resignation, the depreciation of the yen, and a slight pump in the Japanese stock market, first appearing in Chain News ABMedia.