TOKYO (REUTERS, BLOOMBERG) – Japan’s Nikkei index shed most of its early gains to end flat on Friday (July 8) after the country’s former prime minister Shinzo Abe was shot while campaigning for a parliamentary election.
Investors also reflexively sought safe-haven assets like the yen, which rose as much as 0.5 per cent immediately after news of Mr Abe’s shooting, before steadying around at 135.835 to the US dollar.
The Nikkei index closed up 0.1 per cent at 26,517.19 after climbing as much as 1.4 per cent earlier in the session. The broader Topix index also cut most of its gains to close 0.27 per cent higher at 1,887.43.
The Nikkei has gained 2.24 per cent for the week and the Topix 2.3 per cent.
“There must have been mixed reasons for the Nikkei cutting gains today, but the (Abe incident) was one of them, as I believe he still has influence on Japan’s economic and monetary policies,” said general manager Jun Morita at Chibagin Asset Management’s research department.
Mr Abe, best known for his signature Abenomics policy, which featured bold monetary easing and fiscal spending, appeared to have been shot from behind by a man with a homemade gun.
Prime Minister Fumiko Kishida said Mr Abe, 67, was in a grave condition, expressing his wishes for the country’s longest-serving prime minister to survive the ordeal.
“Abe’s absence could affect the Bank of Japan’s ultra-loose monetary policy, which is not positive to the stock market,” said Mr Morita.
The Nikkei rose more than 1 per cent earlier as heavyweight chip-related stocks tracked overnight Wall Street gains, after less hawkish comments from United States Federal Reserve officials eased concerns about US recession.