By the close of trading, the index had fallen to 37,845 points, representing a total decline of 4.8% for the day.
“There is a need to normalize monetary policy,” Ishiba, who won the race for prime minister, said earlier.
The Bank of Japan has been pursuing an ultra-soft monetary policy in recent years to stimulate the market and emerge from a multi-year period of deflation. In the spring, the regulator raised the key interest rate, which had been negative for the first time in 17 years, and in late July raised it to 0.25% against the backdrop of above-target inflation.
The Bank of Japan has since come under criticism for its tightening of monetary policy amid poor economic data, which was one of the key factors that sent stock markets around the world tumbling in early August .
Earlier, the expert revealed whether the fall of the Japanese stock market would affect the Russian economy.