The Nikkei has lost 3.5% in the first two trading sessions this September — more than erasing the month-end window dressing — and now sits at a five-month low. Initially not phasing stocks was the announced resignation of PM Fukuda, with commentary inside and out of Japan noting the rather muted reaction by investors and lack of selling. However, the yawner of a morning session turned into a bout of indigestion in the afternoon, with stocks falling heavily and the Nikkei 225 briefly dropping below 12,500.

So, Japan is leaderless again. Fukuda, who is said to have expressed a goal of topping predecessor Abe’s fifty weeks in office, if by even a day, fell a couple of weeks short. Poll-favorite Taro Aso would likely not last a year as successor. The popular former PM Junichiro Koizumi is highly unlikely to re-emerge. And Yuriko Koike is said to have an outside shot, but really doesn’t seem to have much of a chance at all. That leaves us with Aso, the runner-up last year to Fukuda. Not very inspiring.

On that note, September has been the worst month historically for Japanese stocks. Positive returns have been achieved only about 42% of the time since trading resumed post-WWII, according to a report by Reuters-Tokyo (Aug. 29 weekly Tokyo outlook in Japanese). With that in mind and amidst the current political situation, there is no immediate rush to buy — although, expect a rally from around the 22nd, by which time a new PM should be in place and perhaps a little boost from short-covering and futures buying. Following is a list of September N225 returns since 2000.*

2007: +1.6%
2006: -0.04%
2005: +8.5%
2004: -2.7%
2003: -4.2%
2002: -1.5%
2001: -6.1%
2000: -5.9%

*Based on data from Yahoo! Finance.