SYDNEY: Japanese stocks headed for their steepest weekly fall in a month on Friday as Prime Minister Shigeru Ishiba’s seemingly shifting stance on interest rates unsettled investors and roiled the yen.

Though the Nikkei rose 0.5% at 38,732 in morning trade and had bounced on Thursday, it was 2.8% lower on the week.

The broader Topix was up 0.6% to 2,699 on Friday and down about 1.5% this week.

Ishiba, an erstwhile critic of the Bank of Japan’s aggressive monetary policy easing, won the backing of his ruling Liberal Democratic Party last week and set off a surge in the yen.

That has reversed since he struck a dovish tone this week, saying Japan is not in an environment for an additional rate hikes.

He is due to make a policy speech at 0500 GMT. However, the losses in stocks, which tend to move in the opposite direction to the currency, have not fully recovered.

“We wonder if Prime Minister Ishiba’s comment reflects his inexperience in communicating with financial markets or a desire to stabilise markets ahead of the Oct. 27 election,” said Commonwealth Bank of Australia strategist Joe Capurso. Fast Retailing rose 1.5% and contributed most to the Nikkei’s modest gain on Friday.

Oil and coal, rising with oil prices on concern of widening war in the Middle East, and financials were among other gainers. Shipping companies were the heaviest losers, falling after a faster-than-expected resolution to a US dock workers strike.

Kawasaki Kisen slid 9.2%, Nippon Yusen dropped 8.8% and Mitsui O.S.K. Lines fell 6.7% in their largest declines since a broad market selloff in August.

Japan’s Nikkei bounces on PM Ishiba’s dovish rate comments, weaker yen

“The early end of the ILA dockworkers strike is negative for the container shipping markets as the downward pressure on freight rates will resume,” said Hua Joo Tan, a container shipping analyst at Linerlytica.