0602 GMT - Japan's political uncertainty is unlikely to drag on the country's bond and stock markets, and could even provide a short-term boost, Capital Economics' APAC Head of Markets Thomas Mathews says in a note. Despite the breakup of the long-standing LDP-Komeito coalition, markets have largely shrugged off the turmoil. Mathews notes that investors likely expect the instability to be brief, with newly elected LDP leader Sanae Takaichi eventually becoming prime minister, a scenario CE also sees as its base case. While prolonged policy uncertainty could damp appetite for Japanese assets, the outcome will depend on economic implications, he adds. However, a more divided government could pose longer-term risks if it derails corporate governance overhauls that have lifted profitability at listed companies. (jason.chau@wsj.com)

(END) Dow Jones Newswires

October 15, 2025 02:02 ET (06:02 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.