Japanese Markets Soar to Record High as Takaichi’s Victory Signals New Economic Era
Tokyo’s stock market reached unprecedented heights on Monday, with the Nikkei 225 surging over 4 percent following Sanae Takaichi’s election as leader of Japan’s ruling party. The market reaction came amid expectations of continued monetary easing under her likely premiership.
Takaichi, poised to become Japan’s next prime minister this month, triggered a dramatic market response with the Nikkei 225 climbing to 47,835.36. Simultaneously, the Japanese yen weakened significantly, dropping more than 1 percent to approach 150 against the dollar and hitting a historic low of 175.69 against the euro.
Following her Saturday victory, Takaichi immediately outlined her priorities, emphasizing measures to combat inflation and strengthen Japan’s economy, with particular focus on rural development and primary industries. Market analyst Taro Kimura of Bloomberg Economics noted that while Takaichi appears eager to stimulate the economy, she must carefully balance her approach against rising inflation and climbing bond yields.
The broader Asian markets showed mixed performance, with Singapore and Manila posting gains while Hong Kong, Sydney, and Seoul declined. Shanghai’s market remained closed for a holiday. Meanwhile, global markets continued their upward trajectory, with bitcoin reaching a new high of $125,689 and gold approaching $4,000 per ounce.
In the United States, the ongoing government shutdown entered another week after Senate Republicans’ fourth attempted funding proposal failed. The shutdown has disrupted various public services and delayed crucial economic data releases, including important employment figures used by the Federal Reserve for policy decisions.
The energy sector saw positive movement as oil prices increased by more than 1 percent following OPEC+’s decision to increase production by 137,000 barrels daily, a smaller increment than initially anticipated.
Key market indicators as of 0230 GMT showed:
– Nikkei 225: Up 4.5% at 47,835.36
– Hang Seng: Down 0.5% at 26,995.12
– Dollar/yen: 149.84
– Euro/dollar: $1.1728
– Brent Crude: Up 1.4% at $64.45
The markets continue to anticipate potential U.S. Federal Reserve rate cuts this month, which, combined with the government shutdown and global economic conditions, has contributed to the sustained rally in various asset classes.
