Markets were closed in Japan Monday for a national holiday. The big news for the moment is the election of Yasuo Fukuda to replace Shinzo Abe as prime minister. Below is an abstract from FT Alphaville’s 6am Cut. There were only two choices, so no chance of a real surprise, thus the market reaction is likely neutral to slightly bullish, just because Abe is out of the picture. However, the underlying economic and political problems don’t go away so easily and instead continue to loom over equities. Not to mention the external worries, such as the impact of the U.S. economy (subprime, real estate, consumer credit and spending) on exporters.

Yasuo Fukuda will succeed Shinzo Abe as Japan’s prime minister following his election Sunday as president of the ruling LDP. The party is hoping that the moderate conservative, the first prime minister whose father was also premier, can distance the party from a disastrous year under Mr Abe and rescue its electoral credibility. Mr Fukuda, 71, is due to be installed as prime minister following a vote in Japan’s parliament Tuesday.