Japanese stocks jumped to a record high Monday, leading gains in the region after Prime Minister Sanae Takaichi won a landmark election victory.
The ruling Liberal Democratic Party captured a two-thirds supermajority in the 465-seat lower house, public broadcaster NHK reported.
Japan’s Nikkei 225 jumped past 57,000 for the first time before paring gains to close 3.9% higher at 56,363.94, while the Topix also notched a record high, closing at 3,783.94, up 2.3%.
A decisive win for Takaichi could be the “best outcome” for markets over the medium term, as strategic investments and tax reform bolster equities, said Sree Kochugovindan, senior research economist at Aberdeen Investments.
Japanese stocks have hit several highs over the past few months, driven by the so-called “Takaichi trade” as markets expect the prime minister’s economic policies — seen as growth‑focused continuation of Abenomics — to boost equities, while weakening the yen as she pushes for a looser monetary policy and higher government spending.
Japanese shares’ performance in the past year
The Japanese yen strengthened to 156.88 against the dollar. Yields on the 10-year Japanese government bonds rose nearly 4 basis points to 2.274%, while yields on 20-year JGBs added about 3 basis points to 3.158%.
Takaichi’s administration has gained stronger momentum to pursue a major shift toward proactive fiscal policy, backed by a clear public mandate, Crédit Agricole CIB echoed in a note following her victory.
U.S. President Donald Trump congratulated Takaichi on her victory in a TruthSocial post.
“She is a highly respected and very popular Leader. Sanae’s bold and wise decision to call for an Election paid off big time,” he wrote. “The wonderful people of Japan, who voted with such enthusiasm, will always have my strong support.”
The election follows political upheaval last year, when the LDP lost its majority in the Upper House, and a Lower House defeat in 2024, which prompted then-Prime Minister Shigeru Ishiba to resign in September.
Other Asian markets also traded higher, with South Korea’s Kospi jumping 4.1% to 5,298.04, while the small-cap Kosdaq added 4.3% to 1,127.55.
Australia’s S&P/ASX 200 rose 1.85%, closing at 8,870.1.
Hong Kong’s Hang Seng Index was up 1.71% as of its last hour, while the mainland’s CSI 300 climbed 1.63% to 4,719.06.
India’s Nifty 50 had added 0.61% as of 1:30 p.m. local time (3 a.m. ET).
Thailand’s SET Index jumped almost 4% after Thai Prime Minister Anutin Charnvirakul’s Bhumjaithai Party secured a decisive win in Sunday’s general election.
U.S. futures inched higher.
Last Friday in the U.S., stocks surged as tech names recovered following several days of heavy selling in the sector and bitcoin rebounded following a rout that took the popular cryptocurrency down more than 50% from its high in October last year.
The Dow Jones Industrial Average advanced 1,206.95 points, or 2.47%, closing at 50,115.67. Friday marked the first time the Dow exceeded the 50,000 level. The S&P 500 jumped 1.97% and ended at 6,932.30, while the Nasdaq Composite advanced 2.18% to 23,031.21. With those moves, the S&P 500 climbed back into the green for 2026.
Even with Friday’s pop, the S&P 500 posted a 0.1% decline for the week, while the Nasdaq fell 1.8% on the week. The 30-stock Dow rose 2.5% week to date, benefiting from some rotation into some economically cyclical stocks even as the overall market was weighed down by tech selling.
—CNBC’s Sean Conlon and Alex Harring contributed to this report.
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