Japanese Stocks Break Records, Market Nods to Takaichi's Stimulus
Japanese stocks surged to all-time highs on Monday, while ultra-long-dated government bonds weakened initially but quickly stabilized. The market interpreted the move as a vote of confidence in Prime Minister Sanae Takaichi's fiscal policies, which she described as "responsible and proactive," including stimulus plans and tax breaks.
In the foreign exchange market, the yen briefly weakened to a new low against the Swiss franc, before rebounding after Tokyo warned of potential currency intervention. Takaichi's Liberal Democratic Party (LDP) landslide victory—316 of the 465 seats in the lower house in snap elections—gives her a strong mandate to push for major spending, but Takaichi emphasized that her stimulus would not cause Japan's fiscal situation to "stretch uncontrollably," a sensitive issue given Japan's debt burden, which is among the heaviest in the developed world.
Market commentary highlighted that the election results reduced political uncertainty and reinforced the "Japan is Back" narrative, with investor attention shifting away from "early winners" such as exporters and toward cyclical, financial, and defense stocks. The Nikkei 225 index closed up 3.9% to a record 56,363.94, while the Topix index gained 2.3% to a record close of 3,783.57. (Asd)
Source: Newsmaker.id
