TOKYO : Japan’s stock market hit a record high on Monday, with the benchmark Nikkei Stock Average rising more than 5% after Prime Minister Sanae Takaichi’s ruling Liberal Democratic Party (Liberal Democratic Party) won a majority in the House of Representatives election. The positive election results strengthened investors’ confidence in political stability and the future direction of economic policy.
At the start of trading, the Nikkei average exceeded the 57,000 yen mark for the first time, reflecting broad market gains across major sectors. Analysts say the so-called “high market read,” really fueled by investor expectations for continued fiscal stimulus, tax cuts and aggressive economic policy, is fueling the rally.
The yen weakened against major currencies as stock markets rose, with some investors betting that expansive fiscal spending could push Japanese government bond yields higher and weaken the currency. Given a clear mandate, markets are banking on greater economic flexibility and continuity, which should reduce the uncertainty that has held back investment in recent months.
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