Nikkei Briefly Soars over 3,000 Points on Renewed “Takaichi Trade”

Tokyo, Feb. 9 (Jiji Press)–Japan’s benchmark Nikkei 225 stock average briefly soared more than 3,000 points to top 57,000 for the first time ever in early trading on Monday, as a wide range of issues attracted buying after Prime Minister Sanae Takaichi’s Liberal Democratic Party secured a historic landslide victory in Sunday’s House of Representatives election. The resurgence of so-called Takaichi trade propelled the stock market, with expectations growing for economic stimulus policies, market sources said. The strength of semiconductor-related stocks, which reflected Friday’s gains in their U.S. peers, also pushed the Tokyo market higher. After the initial wave of buying ran its course, however, profit-taking selling emerged, capping the market’s upside. At the morning close, the Nikkei index of 225 selected issues listed on the Tokyo Stock Exchange’s Prime section stood up 2,410.17 points, or 4.44 pct, from Friday at 56,663.85. In Tokyo currency trading, the dollar briefly climbed above 157 yen, with the yen coming under selling pressure due to concerns over the deterioration of Japan’s future finances as the Takaichi administration is expected to find it easier to push through an expansionary fiscal policy. Traders later grew wary of possible yen-buying, dollar-selling market intervention, as Atsushi Mimura, Japanese vice minister of finance for international affairs, said, “We can only watch the market with a high sense of tension.” At noon, the dollar stood at 156.83-85 yen, compared with 156.88-88 yen at 5 p.m. on Friday. Meanwhile, Japanese government bonds were sold. In Tokyo interdealer trading Monday morning, the yield on the most recent issue of 10-year JGBs, regarded as the country’s benchmark long-term interest rate, rose to 2.28 pct, up 0.055 percentage points from late Friday. END [Copyright The Jiji Press, Ltd.]