After Shigeru Ishiba resigns, the Japanese market is preparing for the next political change.

The resignation of the Japanese Prime Minister could potentially exacerbate political uncertainty. This may lead to volatility in the bond or yen markets, but it has boosted the stock market, pushing benchmark stock indices to historical highs. In early trading on Monday, the Nikkei index rose by 1.9% to 43,838.60 points, surpassing the historical highest closing point of 43,714.31 points, reflecting market expectations that long-term political instability will prompt the Bank of Japan to pause interest rate hikes. Exporter stocks are also supported by the weakening of the yen against the US dollar. The 102nd Prime Minister of Japan, Yoshihide Suga, announced his resignation decision on Sunday, succumbing to pressure to take responsibility for his party's election defeat. He had previously resisted calls for his resignation, stating that he needed to first reach a trade agreement with the US and ensure its proper implementation. The recent political turmoil may exacerbate volatility in the Japanese bond market, which has been under pressure from global sell-offs causing a surge in long-term bond yields. If Suga's successor advocates for a looser fiscal policy, concerns about increased supply of Japanese government bonds could push government bond yields in Japan to continue rising.