Japanese shares track Wall Street lower, election outcome in focus

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TOKYO, Sept. 29 (Businesshala) – Japanese shares fell more than 2% overnight on Wall Street shares following rising inflation concerns, while investors await a leadership election from the Japanese ruling party that will see the country’s next premier. The minister will decide.

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The Nikkei average fell 2.48% to 29,563.18 by 0224 GMT, touching its lowest level since September 6. Broader Topics fell 2.42% to 2,031.28.

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The S&P 500 index dropped 2.04% in its biggest one-day percentage drop since May as deepening concerns about inflation lifted US borrowing costs.

Japan’s ruling Liberal Democratic Party will begin voting for a new leader at 1:00 p.m. Japan time (0400 GMT) and the results of the ballots from rank-and-file members and lawmakers are to be announced at 2:20 p.m.

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Taro Kono, Fumio Kishida, Sane Takachi and Seiko Noda are running for the top position. Market participants expect either Kono or Kishida to win.

Kono’s win is seen as a positive for renewable energy firms and digitization-related stocks and negative for electric power companies. Should Takachi win, the yen could fall and the stock could rise if he called for fresh Relationalist policies.

“Investors want to confirm who will be the next prime minister before placing bets,” said Takatoshi Itoshima, strategist at Piket Asset Management.

“The focus is on how the market will react to the election results. With a major drop in Topics this morning, the central bank may step in to support the market.

Technology stocks led the decline, with Tokyo Electron down 4.83%, Daikin Industries down 4.27% and Advantest down 4.9%.

Travel-related stocks outperformed on hopes of a rise in demand as the government plans to lift the state of coronavirus emergency across all sectors on Thursday for the first time in nearly six months.

Airlines rose 1.03%, one of only two sectors that advanced in 33 industry sub-indices of the exchange. The second sector that climbed was shipping, which rose 0.17%. (Reporting by Junko Fujita and Hideyuki Sano; Editing by Subhranshu Sahu)

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