On Monday (September 30), the Nikkei 225 index closed down 4.8% on Monday, falling below 38,000 points.

Among them, semiconductors, automobiles, real estate, transportation equipment and many other industry sectors are down, Toyota Motor and Tokyo Electron fell nearly 8%, Softbank Group fell more than 7%. At the same time, Sumitomo Mitsui, Mitsubishi UFJ and other bank stocks performed strongly.

The yen exchange rate also fluctuated sharply. As of press time, the dollar-yen exchange rate was at 142.14, compared with Friday's Tokyo stock market close of 146.20 appeared to be a sharp decline. 10-year Japanese government bond yields rose 4.5 basis points to 0.850%.

The decline in Japanese stocks is widely believed to be related to the news that Shigeru Ishiba will soon be elected as Japan's new prime minister.

Previously, another candidate, Japan's economic safety and security minister Takashi Hayabusa is regarded as the favorite. Takaichi Hayato and Ishiba Shigeru in the monetary policy views are not quite the same. Gao Shi Saemiao has expressed support for the Bank of Japan to maintain low interest rates, and that further interest rate hikes is “stupid”; on the contrary, Ishiba Shigeru has been criticizing the Bank of Japan's easing policy.

With Ishiba Shigeru “cold” won the Liberal Democratic Party presidential election, forcing investors to cut the previous speculation that the city will become Japan's new prime minister and the establishment of the position.

Mitsubishi UFJ Morgan Stanley Securities senior investment strategist Kohei Onishi said: “Considering the past few trading days the market for the expectations of Takashi Hayabusa's victory and the magnitude of the rise, today's decline is not surprising. This is only temporary. Investors are buying Japanese stocks because of expectations of inflation, rising wages and market reforms, not expectations of BOJ easing. The market will refocus on fundamentals.”

Analysts generally believe that expectations of a rate hike by the BOJ will rise again after Shigeru Ishiba's victory. But perhaps to appease the market, after being elected president of the Liberal Democratic Party, Shigeru Ishiba's stance on monetary policy was more moderate.

When asked whether the Bank of Japan will further raise interest rates, Ishiba Shigeru told the media that this is something the Bank of Japan must decide, the Bank of Japan's responsibility is to achieve price stability.

He further said, “From the government's point of view, given the current economic situation, monetary policy must remain on an accommodative trend.”

On fiscal policy, Shigeru Ishiba said he would seek an early package of measures to cushion the blow to the economy from the rising cost of living, focusing on helping low-income households.

According to Yugo Tsuboi, chief strategist at Daiwa Securities, “When he (referring to Shigeru Ishiba) appeared on some TV programs over the weekend, he didn't talk much about monetary policy or tax hikes. He may be avoiding talking about policies that make the market nervous ahead of a possible election.”