TOKYO, Sept. 1 (Xinhua) -- Japanese stocks, which slumped last Friday over reports about Prime Minister Shinzo Abe's resignation, rebounded sharply on Monday, with the 225-issue Nikkei Stock Average ending above 23,000 again.

Some analysts believed that the stock market of the world's third-largest economy has stabilized from its initial jitters and Abe's resignation may have limited impact on the country's financial markets.

Abe's economic policies, known as "Abenomics," included ultra-loose monetary policies. In 2012 when Abe took office, the Nikkei Average was hovering around the 10,000-yen mark. The index rose to a 27-year high in October 2018, reaching 24,270.

Since the outbreak of COVID-19, the Tokyo stock market declined but managed to recover later.

Masayuki Kubota, chief strategist at Rakuten Securities noted that foreign investors have largely been in oversold positions this year, whether there was a rapid rebound from the coronavirus outbreak or a period of market stalemate since June, with the central bank of Japan snapping up stocks to keep the market stable.

According to Kubota, the Bank of Japan tends to purchase exchange-traded funds (ETFs) when the stock market drops to a certain level to provide sufficient liquidity for the market.

Market players generally believed that the performance of the Tokyo stocks mainly depends on the fundamentals of the Japanese economy, especially the financial environment, and for now, Abe's resignation has limited impact on this factor.

Analysts believed that the Japanese economy is in deep recession due to the uncertain outlook of the epidemic. In such circumstances, Japan's ultra-loose monetary policy will be hard to exit without a significant economic recovery. Even when a new prime minister takes office, it is unlikely that the country's financial and fiscal policies will be shifted drastically.

On reports that Japan's top government spokesperson Chief Cabinet Secretary Yoshihide Suga may join the race to succeed Abe, some investors believed that Suga would make extending Abe's fiscal and monetary policy a smooth one.

Meanwhile, some analysts said that in the latter years of Abe's administration, foreign investors have expressed frustration with Japan's chronically sluggish economy and its lack of competitiveness in leading industries.