"High City Trading" dominates the market, the Nikkei 225 rises above 57,000 points for the first time, Japanese government bond yields rise across the board, and gold returns above the $5,000 mark
The Liberal Democratic Party led by Sanae Takaichi has obtained a supermajority of two-thirds of the seats in the House of Representatives, the highest level for any party in Japan's post-war elections. The Nikkei 225 index rose by 5.15%, reaching 57,000 points for the first time in history. The Tokyo Stock Exchange index increased by 3%. Spot gold rose to around $5,040, up 1.6% for the day; spot silver surpassed the $80 mark, rising over 3% for the day
On Monday, the ruling Liberal Democratic Party (LDP) led by Prime Minister Sanae Takaichi won the election, causing the yen to weaken slightly, while the Nikkei index reached a record high. Other Asian stock markets opened higher, following Wall Street's gains, with the South Korean stock market soaring over 4%. Precious metals rebounded again, with silver surpassing $80.
According to data from Japan's public broadcaster NHK, the ruling LDP secured a supermajority of two-thirds of the seats in the House of Representatives. This seat ratio is the highest level for any party in Japan's post-war elections.
The Nikkei 225 index rose by 5.15%, crossing the 57,000-point mark for the first time in history. The Tokyo Stock Exchange index increased by 3%. SoftBank Group's stock price rose by 8.5%, marking the largest increase since January 28.
The yen traded around 157.50 against the dollar. The yield on Japan's 30-year government bonds rose by 6.5 basis points to 3.615%. The yield on Japan's 10-year government bonds increased by 4.5 basis points to 2.275%.
The LDP's absolute majority in the House of Representatives clears the way for Sanae Takaichi to implement more debt-driven fiscal stimulus, with the market expecting that accommodative policies will continue, putting pressure on the yen. However, due to the significant decline, there is also a risk of verbal intervention from Japanese authorities.
The South Korean Composite Index opened up 4.1%, with Samsung Electronics' stock price rising over 6%.
In the commodities market, spot gold rose to around $5,040, up 1.6% for the day; spot silver surpassed the $80 mark, gaining over 3% during the day. Brent crude oil fell by 1.3% due to easing tensions in the Middle East.
Iron ore will be in focus. Over the weekend, as a tropical cyclone approached the west coast of Australia, major ports in Australia were closed, forcing bulk carriers to head out to sea. The waters near the Pilbara region of Australia also include several oil and gas operational facilities.
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