Japanese Stocks Wobble After Prime Minister Resigns

By the end of the trading day in Tokyo, the Nikkei 225 index had more than given up gains it had made for a brief time after the news of the resignation, closing down 1.1 percent at 9,603.24 points.

A slide in the yen — a traditional beneficiary of global uncertainty because it is seen as a haven — also proved modest and short lived. By mid-afternoon, it took 91.4 yen to buy one dollar, little more than before the announcement.

The Japanese currency also briefly weakened to 112.5 yen against the euro, but by mid-afternoon, slide had evaporated, and it took 111.6 yen to buy 1 euro — nearly unchanged from where it was before Mr. Hatoyama announced his resignation.

Analysts struggled to find a consensus on what — if any — implications the resignation would have for financial markets, or for Japan’s economic prospects.

Some said the move might serve to resolve some of the political turmoil that has been brewing in the country for months.

“The latest developments have raised hopes that the political morass that was seen as an impediment to the government’s economic policies may be cleared, which explains the various reactions of the markets,” Koichi Ono, senior strategist at Daiwa Securities Capital Markets in Tokyo, told Reuters, as the Nikkei 255 index rose after the news of the resignation.

Others said Mr. Hatoyama’s departure was unlikely to give any short-term impetus to reforms in Japan.

“The government has said it will map out a growth strategy and fiscal reform plan in June, but everything will have to start from scratch under a new leader. Usually that kind of delay would be a concern for markets,” Yasuhide Yajima, senior economist at NLI Resesarch Institute, told Reuters.

Elsewhere in the region on Wednesday, stocks were mixed.

The Straits Times index in Singapore and the Sensex in India gained 0.4 percent.

But the benchmark S&P/ASX 200 in Australia fell 0.7 percent, and the Hang Seng in Hong Kong sagged about 0.5 percent. In Taiwan, the Taiex shed 1.3 percent, and in mainland China, the Shanghai composite index dropped 1.5 percent.

South Korea was closed for a public holiday.

Even with the recent declines in global stock markets, wealthy investors in Asia remain on average significantly less pessimistic than those elsewhere about the global economic recovery, according to a global survey of affluent individuals that was presented by analysts at Barclays Wealth in Hong Kong on Wednesday.

Given that much of Asia — notably China and India — is growing rapidly, this relative optimism is “reasonable,” they said.

Still, commented Manpreet Gill, Asia strategist at Barclays Wealth, “there’s a lot of nervousness out there.”

He added that it will be very hard to say when the stock markets have hit a bottom.

The downward moves in much of the Asia-Pacific on Wednesday followed a poor performance on Wall Street, where the Dow Jones industrial average shed 112.61 points, or 1.1 percent, on its first day of trading this week.

The U.S. market had been shut for a holiday on Monday, and investors there coming back to work Tuesday had fresh worries about Europe’s fiscal health — and the continent’s banking system — to digest: on Monday the European Central Bank had released a report that warned that European banks remained vulnerable to a daunting array of hazards that are expected to produce another round of sizable write-offs during the next couple of years.

That helped send the beleaguered euro lower on Tuesday: the currency slipped to a new four-year low of $1.2110 on Tuesday.

It was hovering around $1.222 during the Asian afternoon on Wednesday. New York Times