(Sharecast News) - Asia-Pacific equities traded mostly higher on Monday as investors digested Japanese prime minister Shigeru Ishiba's resignation announcement and weaker-than-expected Chinese trade data.
Markets also tracked a rebound in oil prices after OPEC+ signalled a slower pace of production increases.
"The yen dropped sharply and Japanese markets gained after PM Ishiba announced his resignation," said Patrick Munnelly, market strategy partner at TickMill.
"Asian markets increased as traders were more confident about potential Fed rate cuts.
"Japan's currency declined by 0.5% against the dollar amid fears that political instability could hamper the Bank of Japan's ability to raise interest rates."
Markets mostly rise, Japan jumps on PM resignation news
In Tokyo, the Nikkei 225 jumped 1.62% to 43,717.00, while the broader Topix rose 1.06% to 3,138.20.
Gains were led by Mazda Motor, which surged 7.15%, Resonac Holdings, up 5.81%, and IHI, which added 5%.
The weaker yen, coupled with expectations of policy support, underpinned sentiment.
"The weaker yen and the prospect of increased government assistance led to a rise in Japanese stock prices," Munnelly added.
"Ishiba's resignation, which was announced over the weekend, followed his Liberal Democratic Party's loss of majorities in both legislative houses during recent elections.
"His exit raises worries among investors as they await the appointment of a new leader in the forthcoming weeks."
Chinese shares edged higher despite disappointing August trade data, with exports and imports both missing expectations.
The Shanghai Composite rose 0.38% to 3,826.84, while the Shenzhen Component gained 0.61% to 12,666.84.
Standout performers included Beijing Worldia Diamond Tools, which hit the 20% daily limit, Nanjing Tanker, up 10.16%, and Center International Group, ahead 10.04%.
In Hong Kong, the Hang Seng Index advanced 0.85% to 25,633.91, supported by sharp gains in Baidu, up 9.48%, Citic Pacific, which added 6.81%, and WuXi Biologics, ahead 5.52%.
South Korea's Kospi 100 gained 0.45% to 3,255.91, with Netmarble Games up 5.92%, Mirae Asset Daewoo Securities rising 3.63%, and Hanwha Techwin adding 3.37%.
In Australia, the S&P/ASX 200 slipped 0.24% to 8,849.60, dragged lower by Super Retail Group, down 4.19%, QBE Insurance, which fell 3.65%, and AUB Group, down 3.56%.
New Zealand's S&P/NZX 50 rose 0.44% to 13,281.14, led by Infratil, up 2.65%, Summerset Group, ahead 2.63%, and Port of Tauranga, which gained 2.43%.
In currencies, the yen weakened, with the dollar last up 0.2% at JPY 147.73.
The greenback meanwhile slipped 0.4% against the Aussie dollar to AUD 1.5189, and fell 0.51% on the Kiwi to change hands at NZD 1.6886.
Oil prices climbed after OPEC+ confirmed further production hikes from October, though at a sharply reduced pace.
Brent crude futures were last up 2.02% on ICE at $66.82 per barrel, while the NYMEX quote for West Texas Intermediate also added 2.02% to $63.12.
"In the commodities sector, oil prices increased after OPEC+ came to an agreement on Sunday to gradually boost output next month," Munnelly noted.
"Crude futures had declined last week due to expectations of a looming rise in production."
China trade surplus widens, Japan economic growth revised higher
In economic news, China's trade surplus widened more than expected in August, though both exports and imports slowed, underscoring fragile global and domestic demand.
Customs data showed the surplus rose to $102.3bn, above forecasts of $99.4bn and July's $98.24bn.
Exports increased 4.4% year-on-year in dollar terms, missing projections of 5% and easing from July's 7.2% growth as momentum from a temporary tariff truce with the US began to fade.
Imports rose just 1.3%, short of expectations for 3% and down from July's 4.1%, pointing to subdued domestic demand and fuelling calls for fresh government stimulus.
Japan's economy meanwhile grew more strongly than first estimated in the second quarter, helped by firmer consumer spending and inventories, though risks from US tariffs and political uncertainty remained.
Revised Cabinet Office data showed GDP expanded at an annualised 2.2% in the three months to June, more than double the initial 1% estimate and above economists' forecasts.
On a quarterly basis, GDP rose 0.5%, compared with the 0.3% initially reported.
The upgrades reflected stronger restaurant, gaming and corporate spending data, while private consumption, which makes up over half of GDP, was revised up to 0.4% from 0.2%.
Capital expenditure was revised down to 0.6% from 1.3%, while external demand contributed 0.3 percentage point, unchanged from the preliminary reading.
Munnelly cautioned that global economic signals remained fragile.
"Non-farm payrolls continued their downward trajectory in August, with a modest gain of 22,000 - well below the 75,000 median forecast - following July's disappointing figures.
"Year-to-date payroll performance paints a fragile picture ... the broader labour market appears stagnant.
"The outlook for the labour market seems increasingly precarious."
Reporting by Josh White for Sharecast.com.
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