Nikkei Hits Another High after LDP’s Landslide Election Victory

Tokyo, Feb. 9 (Jiji Press)–Japan’s benchmark Nikkei 225 stock average soared to another all-time closing high on Monday, following the ruling Liberal Democratic Party’s sweeping victory in Sunday’s House of Representatives election. The index of 225 selected issues listed on the Tokyo Stock Exchange’s Prime section temporarily gained over 3,000 points before closing at 56,363.94, up 2,110.26 points, or 3.88 pct, from Friday. The broader TOPIX index rose 84.57 points, or 2.29 pct, to 3,783.57. About 80 pct of stocks on the Prime section advanced after the LDP, headed by Prime Minister Sanae Takaichi, secured a two-thirds majority in the all-important lower chamber of the Diet. “The market had priced in a simple majority win for the LDP alone, but the election outcome (for the party) was stronger than expected,” said an official of a Japanese securities firm. Stocks were driven by the so-called Takaichi trade after the election results boosted hopes for her economic stimulus measures with aggressive fiscal spending. “Concerns about possible political turmoil receded, and market participants grew hopeful that Prime Minister Takaichi will press ahead with aggressive fiscal policy,” said an official of a major brokerage firm. Meanwhile, an official of a midsize securities firm warned that the stock market has been rising “too rapidly.” In Tokyo currency trading, the dollar briefly climbed to around 157.70 yen in Monday morning, reflecting concerns about possible deterioration in Japan’s public finances under Takaichi. However, the greenback later dropped to around 156.20 yen, as concerns about possible yen-buying intervention by Japanese authorities grew among market participants after Atsushi Mimura, Japanese vice minister of finance for international affairs, said, “We will pay close attention to the market with a sense of urgency.” At 5 p.m., the dollar stood at 156.59-59 yen, down from 156.88-88 yen at the same time Friday. The euro was at 1.1855-1855 dollars, up from 1.1791-1791 dollars, and at 185.66-67 yen, up from 184.99-99 yen. In the bond market, the yield on the newest issue of 10-year Japanese government bonds, regarded as Japan’s benchmark long-term interest rate, rose as high as 2.290 pct. “The market could become stormy, depending on factors including whether (the Takaichi administration) will carry out a consumption tax cut,” an official of a domestic securities firm said. END [Copyright The Jiji Press, Ltd.]