Japan’s parliament has formally elected Shigeru Ishiba, head of the governing Liberal Democratic Party, as the country’s new prime minister

Ishiba, who chosen as the ruling Liberal Democratic Party's new leader on Friday, replaces Fumio Kishida who stepped down after his government was dogged by multiple scandals.

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.