In an urgent statement, Japanese Prime Minister Shinzo Abe resigned from his post today for health reasons, causing confusion in the financial markets, which was evident in the levels of the Japanese yen that rose by 1.1% since the beginning of today's session against the dollar.
Shinzo Abe stated that his health has started to deteriorate since mid-July, and he decided to step down from his post due to the treatment measures and his inability to do his best, especially in light of the Corona crisis that strikes Japan and the whole world.
The financial markets in Japan received the news somewhat negatively, as the Japanese stock indices fell significantly, with the Nikkei 225 index closing down 1.41%, losing 326.21 points, at 22,882.65 points.
The dollar fell against the Japanese yen to its lowest level this week at 105.31, after opening today's session at 106.54, and it had hit its highest level in two weeks at the start of today's session at 106.93.
The significant rise in the levels of the Japanese yen was due to the expectation of traders that the economic reform plan adopted by Shinzo Abe since he took over the reins in 2012 will be stopped or suspended at the very least, given the fact that the stimulus measures were the main reason behind the weakness of the Japanese yen in the markets.
The "Abenomics" plan, as it is called, has not achieved its goals over the years of its implementation, and the recent Corona crisis that hit Japan came to place the last nail in the coffin of achieving the goals of this plan.
But no one denies that this plan kept the levels of the Japanese yen low for several years, and this caused exporting companies in Japan to achieve more profits, which became doubtful after Shinzo Abe stepped down and the possibility of disrupting this plan in the short term.
On the other hand, we
find that the US dollar is facing a some downside pressure after Fed President
Jerome Powell’s speech at the Jackson Hole symposium yesterday, as he indicated
that the low interest rate levels will continue to be maintained for a longer
period of time, along with continuing concerns regarding the future of economic
activity and growth goals.