Asian stock markets exhibited a mixed performance on Wednesday, with Japan’s Nikkei 225 initially rising but later retracting following news that the Japanese prime minister will not seek re-election as head of the ruling party. In morning trading, the Nikkei 225 was marginally lower at 36,192.93. Meanwhile, Australia’s S&P/ASX 200 climbed 0.5%, South Korea’s Kospi increased by 0.7%, Hong Kong’s Hang Seng declined 0.3%, and the Shanghai Composite dropped 0.4%.

Prime Minister Fumio Kishida’s decision not to seek re-election comes amidst dwindling public support due to a scandal involving questionable finances and overall voter dissatisfaction. Speculation suggests that the ruling Liberal Democratic Party may opt for a younger leader, potentially someone like Shinjiro Koizumi, son of former Prime Minister Junichiro Koizumi, who is in his 40s, reflecting a shift from Japan’s traditionally older prime ministers.

Despite an overnight surge on Wall Street, Japanese stocks experienced fluctuations due to profit-taking, later recovering. Global markets are cautious amid uncertainty concerning the U.S. economy. Japan anticipates a series of upcoming economic data releases, including machinery orders, trade figures, international traveler count, unemployment rates, and consumer prices, indicating the sustained strength of the Japanese economy.

In the US, stocks recorded significant gains following a positive report on wholesale inflation, with the S&P 500 marking its third-best day of the year by surging 1.7%. The Dow Jones Industrial Average and the Nasdaq composite also posted notable increases. The easing of inflation concerns in the US suggests a potential relaxation of high interest rates by the Federal Reserve.

Treasury yields softened in response to the subdued inflation data as expectations grow for an interest rate cut at the Fed’s upcoming meeting. Investors are also awaiting updates on consumer spending and inflation figures from the US government. Despite concerns about a slowdown in hiring last month, the economic outlook remains positive, dispelling fears of an imminent recession.

Notable developments in the market include Starbucks’ stock soaring by 24.5% after appointing Brian Niccol, the former CEO of Chipotle Mexican Grill, as the new chief executive. Conversely, Chipotle’s stock plummeted by 7.5%. In the energy market, benchmark U.S. crude and Brent crude both registered gains. Currency trading saw the U.S. dollar slightly weakening against the Japanese yen and the euro remaining stable.

Overall, global markets are closely monitoring economic indicators and geopolitical developments for insights into future market trends.