Shares in Tokyo fell sharply Monday, on concerns that Japan's next prime minister could adopt policies that wouldn't be very friendly to the economy and markets. The benchmark Nikkei Stock Average fell 4.

Ishiba has expressed support for the Bank of Japan's moves to raise interest rates from their near-zero level. He also backs other policies, such as possibly raising corporate taxes, that are seen as less market friendly than his chief rival for the top job, Economic Security Minister Sanae Takaichi, who he beat in a run-off vote late Friday.

Stocks in Japan fell sharply on Monday after the country’s governing party chose a leader some view as hawkish on interest rates, underlining how central bank decisions continue to set the course of the world’s fourth-largest economy after decades of easy money policy.

Japan’s benchmark Nikkei 225 index tumbled nearly 5% early Monday after the country’s ruling Liberal Democrats chose Shigeru Ishiba, a former defense minister, as the next prime minister.