Capital Economics: Political uncertainty in Japan unlikely to weigh on the country's bonds and stocks

Odaily Planet Daily News: Thomas Mathews, head of Asia-Pacific markets at Capital Economics, said in a report that political uncertainty in Japan is unlikely to drag down the country's bonds and stocks, and may even bring a short-term boost. Despite the split between the long-term ruling coalition, the Liberal Democratic Party and the Komeito Party, the market has remained largely indifferent. Mathews pointed out that investors may expect that the turmoil will be short-lived and that the newly elected head of the Liberal Democratic Party, Sanae Takaichi, will eventually become prime minister - this is also the basic scenario expected by Capital Economics. He added that although if policy uncertainty persists, it may weaken the market's interest in Japanese assets, it will ultimately depend on the impact on the economy. However, if the government becomes more divided, it may pose risks in the long run - especially if it hinders corporate governance reforms that help improve profitability. (Jinshi)