On Monday (September 8th) local time, Japanese stocks opened higher with the Nikkei 225 index gaining 1% at the open. After modest fluctuations, gains continued to expand, reaching intraday highs of over 1.88%.

Simultaneously, the Tokyo Stock Price Index (TOPIX) broke through its August 18th high, reaching a historic peak of 3,135.77 points at one point. As of 10:30, daily gains exceeded 0.9%.

The yen plummeted sharply. On the morning of September 8th, the yen exchange rate nosedived, with the USD/JPY rate surging as much as 0.79% at one point. As of around 11:00 Beijing time, gains were approximately 0.5%.

According to news reports, around 18:00 local time on the 7th, Japanese Prime Minister and Liberal Democratic Party (LDP) President Shigeru Ishiba held an emergency press conference at the Prime Minister's Office, announcing his decision to resign from the position of LDP President. On the morning of the 8th local time, the LDP successively convened extraordinary executive meetings and election management committee meetings to formally discuss implementing a presidential election. The specific schedule and format of the election may be announced as early as tomorrow.

Currently, the LDP does not hold a majority in either chamber of the Diet, facing a "dual minority" predicament. Who will succeed as party president and prime minister remains unpredictable.

According to additional reports, on September 4th local time, the White House issued a statement indicating that US President Trump signed an executive order formally implementing the US-Japan trade agreement.

The statement indicated that under this agreement, the US will impose a 15% baseline tariff on almost all Japanese imports entering the United States. Japanese imports previously subject to higher tariffs will not face double taxation, while goods previously taxed below 15% will be adjusted to the new rate. Separate industry-specific treatment will apply to automobiles and auto parts, aerospace products, generic pharmaceuticals, and natural resources that cannot be naturally obtained or produced within the United States.

Japanese Government Bond Market Remains at Storm's Forefront

According to observations, on September 3rd, Japanese ultra-long-term government bond yields reached historic highs. One day later, Japan's 30-year government bond auction again received a lukewarm response. On September 4th, Japan auctioned 700 billion yen in 30-year government bonds with a bid-to-cover ratio of 3.31, the lowest level since June and below the 12-month average of 3.38. However, market analysts believe this Japanese 30-year government bond auction basically aligned with the 12-month average, providing temporary relief for the global bond market recently impacted by escalating government spending. Market analysts warn this represents only tactical relief rather than a trend reversal.

The primary reason for this round of soaring Japanese government bond yields was the rate hike signal released by Bank of Japan Governor Kazuo Ueda after his meeting with Prime Minister Shigeru Ishiba on September 3rd. This development caused Japanese long-term government bond yields to surge across the board, Japanese stocks to decline broadly, and the yen to plummet sharply against the dollar.