Japanese stocks surged to a record high as Prime Minister Sanae Takaichi’s election victory boosted hopes for aggressive fiscal stimulus and tax cuts
NEW YORK: Japanese stocks surged to a record high as investors cheered Prime Minister Sanae Takaichi’s resounding victory in a snap parliamentary election. Her Liberal Democratic Party secured around a two-thirds majority, paving the way for increased fiscal stimulus and massive tax cuts.
The benchmark Nikkei 225 rose above 57,000 points for the first time, while the yen also advanced. “A big victory was expected but this is probably even more impressive,” said Jim Reid, managing director at Deutsche Bank.
He added that the “supermajority has raised the prospects of even more aggressive policy, including fiscal plans.” The positive sentiment in Japan helped boost markets across Asia, with Hong Kong, Shanghai and Seoul all closing higher.
Seoul’s market climbed more than 4%, helped by a 6% jump in Samsung shares. Bangkok added more than 3% after a decisive election victory for caretaker Prime Minister Anutin Charnvirakul’s conservative Bhumjaithai Party.
In Europe, UK bond yields pushed higher amid political uncertainty. British Prime Minister Keir Starmer faced pressure after his government became embroiled in the Jeffrey Epstein scandal.
“A political risk premium is once again being built up in UK asset prices,” said Kathleen Brooks, research director at trading group XTB. In the United States, the Dow Jones Industrial Average nudged to a second straight record after topping 50,000 points for the first time on Friday.
Analysts said caution still dominates the tech sector, hit by worries over AI investment returns. Economic data due this week includes US retail sales, jobs and inflation figures.
In other company news, shares in Novo Nordisk rallied 5.3% in Copenhagen. The firm filed suit against Hims and Hers seeking to block sale of “knock off” versions of weight loss drugs Wegovy and Ozempic, causing Hims and Hers shares to sink 16%.
