Japanese stocks jumped to a record high Monday, leading gains in the region after Prime Minister Sanae Takaichi won a landmark election victory.
In Japan, the Nikkei 225 climbed 2,110.26 points, or 3.9%, to 56,363.94.
The ruling Liberal Democratic Party captured a two-thirds supermajority in the 465-seat lower house, public broadcaster NHK reported.
A decisive win for Takaichi could be the “best outcome” for markets over the medium term, as strategic investments and tax reform bolster equities, said Sree Kochugovindan, senior research economist at Aberdeen Investments.
Japanese stocks have hit several highs over the past few months, driven by the so-called “Takaichi trade” as markets expect the prime minister’s economic policies — seen as growth focused continuation of Abenomics — to boost equities, while weakening the yen as she pushes for a looser monetary policy and higher government spending.
The Japanese yen strengthened to 156.88 against the dollar. Yields on the 10-year Japanese government bonds rose nearly four basis points to 2.274%, while yields on 20-year JGBs added about 3 basis points to 3.158%.
Takaichi’s administration has gained stronger momentum to pursue a major shift toward proactive fiscal policy, backed by a clear public mandate, Crédit Agricole CIB echoed in a note following her victory.
In Hong Kong, the Hang Seng index recovered 467.21 points, or 1.8%, to 27,027.17.
In other markets
The CSI 300 in Shanghai regained 26.42 points, or 0.5%, to 4,719.06.
In Korea, the Kospi hiked 208.90 points, or 4.1%, to 5,298.04.
In Taiwan, the Taiex popped 621.70 points, or 2%, to 32,404.62.
In Singapore, the Straits Times Index gained 26.42 points, or 0.5%. to 4,960.83.
In Australia, the ASX recovered 161.27 points, or 1.9%, to 8,770.10.
In New Zealand, markets returned from a long weekend to inch up 2.35 points to 13,446.37
