Japan's incoming prime minister Shigeru Ishiba said on Friday the country's monetary policy will broadly remain loose, but he signalled that he won't push back against further increases in still near-zero interest rates.

The yen surged in a dramatic turnaround, Japanese bond futures dropped, and Nikkei 225 Stock Average futures retreated after Shigeru Ishiba clinched leadership of Japan’s ruling Liberal Democratic Party.

Japan financial markets have stopped expecting another interest rate hike this year, after Bank of Japan was on hold last week at its policy meeting. The overnight index swaps market is now discounting only a 5 basis points cut by the end of this year,

Political uncertainty and the surprise prominence of a reflationist-minded candidate in Japan's ruling party leadership race may add pressure on the central bank to go slow on raising interest rates further away from historic lows.

At the July meeting, the BOJ raised short-term interest rates to 0.25% and unveiled a detailed plan to slow its massive bond buying, taking another step towards phasing out a decade of huge stimulus. Copyright 2024 Thomson Reuters.

Tokyo residential property prices are likely to hold up after the Bank of Japan’s interest-rate increases, though some areas may see declines, industry experts say.

Japan's ruling party leadership race, which will determine who becomes next prime minister, could complicate the central bank's plan to normalise ultra-loose monetary policy. Here are some details on how the outcome of the race,