Nikkei Ends at Record High after Takaichi Wins LDP Poll

Tokyo, Oct. 6 (Jiji Press)–Japan’s benchmark Nikkei 225 stock average closed at an all-time high Monday after soaring more than 2,300 points briefly, on expectations for an aggressive fiscal policy by Sanae Takaichi, the newly elected leader of the ruling Liberal Democratic Party. The key index for the Tokyo Stock Exchange’s top-tier Prime section finished up 2,175.26 points, or 4.75 pct, from Friday at 47,944.76, beating its previous record closing high of 45,769.50, marked on Friday. The broader TOPIX index closed up 96.89 points, or 3.10 pct, at 3,226.06, also an all-time high. Buying was rampant across a wide range of stocks from morning trading, after Takaichi, “who was described as a candidate with an expansionary fiscal policy stance” won the LDP presidential election Saturday, an official of a domestic securities company said. She is expected to be elected the country’s prime minister at an extraordinary parliamentary session likely to be convened shortly. In particular, Mitsubishi Heavy Industries and other issues related to defense and nuclear power, listed by Takaichi as important sectors, advanced significantly. On the other hand, some banks were sold on the view that the possibility of an early interest rate hike by the Bank of Japan may diminish with the inauguration of Takaichi, who favors monetary easing, as LDP president. In Monday’s currency trading, yen selling accelerated both against the dollar and the euro, as Takaichi’s election led to receding expectations for an early BOJ interest rate hike. “As Takaichi is seen as an advocate of the “Abenomics” reflationary economic policy mix promoted by the late Prime Minister Shinzo Abe, expectations have grown that she will introduce stimulus measures,” an official at a Japanese asset management company said. At 5 p.m., the U.S. currency stood at 150.00-00 yen, up sharply from 147.40-42 yen at the same time Friday. The euro hit an all-time high against the yen since the European currency was launched in 1999, before standing at 174.97-98 yen at 5 p.m., compared with 172.94-96 yen. In interdealer trading in Tokyo on Monday, the yield on the newest issue of 10-year Japanese government bonds, regarded as Japan’s benchmark long-term interest rate, rose to 1.680 pct, the highest level since July 2008. END [Copyright The Jiji Press, Ltd.]