investors flocked to safe haven assets as they learned that former Japanese Prime Minister Shinzo Abe bled to death after being shot at an event on Friday.
The yen and US government bonds rose in price. The Japanese currency strengthened by 0.5%, but soon rolled back to 135.75. The yield on 10-year US government bonds fell 2% to 2.97%. Futures on the Nikkei 225 in Osaka lost the 1.4% growth it won back earlier.
Analysts and experts are wondering how this event will turn out. The options vary, from a possible shift in political support for the central bank to expectations that any reaction in the markets will be temporary. Elections to the upper house of parliament will be held in Japan on Sunday.
Here’s what the experts say:
Long Term Consequences
„This event could have medium to long-term implications, with markets seeing significant appreciation in the yen and lower equity prices,” said Tomoichiro Kubota, senior market analyst at Matsui Securities. “Abe supported the head of the Bank of Japan, Kuroda; Central Bank policy may change if they lose its support.”