Japanese stocks fell sharply after Shigeru Ishiba’s unexpected win over Sanae Takaichi in the ruling party’s leadership race, disrupting investor expectations of more monetary stimulus. The Nikkei 225 dropped 4.8%, and the Topix index fell 3.5%. The yen strengthened, and 10-year bond futures declined. The selloff, driven by short-term speculators, hit exporters hardest due to yen concerns, while the banking sector was the only gainer.