Investing.com– Most Asian stocks rose on Monday as concerns over the Israel-Iran conflict were soothed by a less severe than feared attack by Israel, while Japanese shares rose past increased political uncertainty.
Japanese markets were the best performers on Monday as the ruling Liberal Democratic Party lost its parliamentary majority, with investors betting that heightened political uncertainty will diminish the chances of more interest rate hikes by the Bank of Japan.
Israel attacked Iran over the weekend, but avoided hitting Tehran’s oil and nuclear infrastructure, marking a less severe escalation in the long-running conflict. Most Asian markets rose on this notion, while oil prices slumped.
Regional markets took middling cues from a mixed Friday close on Wall Street, with focus turning squarely to a string of key technology earnings and economic readings due this week. U.S. stock index futures rose in Asian trade, on optimism over the Middle East.
Japanese shares rise as political uncertainty quashes rate hike bets
Japan’s Nikkei 225 and TOPIX indexes rose 1.5% and 1.2%, respectively.
A coalition led by the country’s ruling Liberal Democratic Party lost its parliamentary majority in an election held on Sunday, raising doubts over the political make-up of the country in the coming years, local media reports showed.
The LDP will now have to seek alliances with smaller, regional parties, although such a scenario points to a more fractured economic climate in the country.
While such a scenario presents more uncertainty for Japanese markets, it also diminishes the ability of the BOJ to keep raising interest rates. The yen fell sharply on this notion, benefiting export-oriented stocks.
