Nikkei Tumbles 1.66 Percent Amid Shinzo Abe Resignation, UK-Japan Post-Brexit Trade Talks - Report

News of Japanese prime minister Shinzo Abe's declining health has sent markets tumbling on Friday, reports revealed.

The announcement of Mr Abe's resignation, set to take place in 2021, as well as news from the US Federal Reserve sent the Nikkei 225 tumbling 1.66 percent but later recovered 88 points to 23,297.

The Shanghai composite rose 1.08 percent and the Hong Kong Hang Seng index climbed 161 points to 25,442, or 1.34 percent.

Shinzo Abe: Key Highlights of His Time as Longest-Serving Japanese Prime Minister

28 August 2020, 10:00 GMT

The 65-year-old leader who served eight years in office from 2012, resigned after worsening symptoms from ulcerative colitis, an inflammatory condition of the intestines. Abe was known for his 'Abenomics' policy of aggressive quantitative easing and conservative nationalism, and will remain Prime Minister until the government chooses a successor.

The news follows reports from the Nikkei Asian Review that Japan and the United Kingdom are set to ink a lucrative trade deal as soon as early September, with goods such as British cheese receiving tariff reductions.

“We have reached a consensus in many elements of the deal, including digital data and financial services that goes beyond the EU-Japan trade deal. We still wish to reach a formal agreement by the end of this month. Many major elements of the deal have been agreed,” a Downing Street spokesperson said.

Japan's Prime Minister Abe Set to Resign

28 August 2020, 05:11 GMT

UK trade secretary Liz Truss plans to conclude trade talks as the country finalises its post-Brexit transition period at the end of December. While the effects of news remain uncertain, it is understood it could push back the expected deadline.

According to CityAM, a Department for International Trade (DfIT) official said Japan was pressured to wrap up the deal by the end of August.

"We aim to reach agreement in principle in the coming weeks. We have always been clear that we will take the time needed to agree a deal that works for the UK,” a second official said in a statement.

The trade deal aims to lower tariffs on British agricultural exports and boost access for Japanese digital service firms to UK markets, a source close to Ms Truss said as quoted by the newspaper.