Political Uncertainty in Japan Shakes Global Markets

Asian shares largely declined, echoing Wall Street's downturn, as political unrest in Japan influenced cautious trading. Prime Minister Shigeru Ishiba's future remains uncertain, contributing to market instability. The U.S. bond market also felt pressure from rising yields, while U.S. manufacturing data fell short of expectations.

Asian shares declined largely on Wednesday, mirroring a downturn on Wall Street, as political turbulence in Japan triggered cautious trading on the Tokyo Stock Exchange. In afternoon trading, Japan's benchmark Nikkei 225 shed nearly 1%, landing at 41,894.70.

The political landscape in Japan is uncertain with Prime Minister Shigeru Ishiba facing calls to both resign and remain, following a recent electoral setback and the emergence of fringe parties that have shaken confidence in the ruling Liberal Democratic Party. Further destabilizing was Hiroshi Moriyama's resignation as party secretary-general, a key ally to Prime Minister Ishiba.

Global markets echoed this uncertainty. The S&P 500 had its worst day in a month, driven down by Big Tech declines and pressure from rising bond yields. Additional strain was seen as a U.S. appeals court maintained tariffs imposed by President Trump, fanning economic chaos. Meanwhile, gold prices increased as investors sought stability amidst financial turbulence.

(With inputs from agencies.)