Japan’s Nikkei 225 Surges Past 57,000 After Prime Minister Takaichi Wins Historic Mandate
Japan’s stock market soared to record levels on Monday as investors reacted to Prime Minister Sanae Takaichi’s landmark election victory. The Nikkei 225 surged past 57,000 for the first time in history before closing 3.9% higher at 56,363.94, while the broader Topix index also hit a record, ending the session at 3,783.94, up 2.3%. Market watchers say the results signal renewed confidence in Japan’s economic direction.
The ruling Liberal Democratic Party (LDP) captured a two-thirds supermajority in the 465-seat lower house, according to public broadcaster NHK. Analysts describe this decisive win as a major catalyst for equities, as Takaichi’s administration is expected to push ahead with growth-focused policies, strategic investments, and tax reforms—measures likely to support corporate earnings over the medium term.
“This could be the best outcome for Japanese markets in the foreseeable future,” said Sree Kochugovindan, senior research economist at Aberdeen Investments. “Takaichi’s approach, often seen as a continuation of Abenomics, encourages both domestic investment and a more flexible fiscal policy, which investors have responded to positively.” The so-called “Takaichi trade” has already been driving equities higher in recent months, with traders anticipating further market-friendly reforms.
The victory also coincides with shifts in Japan’s currency and bond markets. The yen strengthened to 156.88 against the U.S. dollar, while 10- and 20-year government bond yields edged higher. Financial institutions, including Crédit Agricole CIB, noted that Takaichi’s strengthened mandate gives her room to pursue proactive fiscal policy, bolstering both domestic confidence and international investor sentiment.
The rally in Japan inspired broader gains across Asia. South Korea’s Kospi jumped 4.1%, Australia’s S&P/ASX 200 rose 1.85%, and Hong Kong’s Hang Seng Index gained 1.71%. Investors in the U.S. also cheered, with the Dow surpassing 50,000 for the first time last Friday. Analysts suggest that Takaichi’s win, coupled with improving global market sentiment, could sustain momentum for equities across the region in the coming weeks.
source: cnbc