Tokyo, Japan – Japanese stock markets surged to record highs on Monday following the Liberal Democratic Party’s (LDP) landslide victory in parliamentary elections. The Nikkei 225 index jumped 5%, reaching a record high of 57,000 points for the first time ever.
Historic election results
The final results of the vote count showed the ruling party winning 316 seats, exceeding the absolute majority of 261. This gives it a two-thirds majority in parliament, its largest since the party’s founding in 1955. Analysts believe this result ends the political uncertainty in the country and gives the government full authority to implement bold economic policies.
Market reaction
The Nikkei index closed at 56,363.94 points, up 2,110 points from Friday’s close. Market analysts attributed this rise to the strong mandate the ruling party received, which empowers it to implement market-friendly policies without political compromises. The gains in Japanese technology stocks, buoyed by the performance of companies like Nvidia and Broadcom on Wall Street, also contributed to the rise. The new government is expected to present a budget bill in February to address rising costs and slow wage growth, further boosting optimism in financial markets.
Impact on global markets
The wave of optimism extended to other Asian markets, with South Korea’s Kospi index climbing 4.2%. Hong Kong’s Hang Seng index and China’s Shanghai Composite also rose by more than 1.3%. On Wall Street, futures stabilized after a strong rally last Friday, which saw the Dow Jones Industrial Average surpass the 50,000-point mark.
Currencies and Commodities
In the currency markets, the dollar edged down slightly against the yen, trading at 156.62 yen. Meanwhile, gold prices rose 1.5%, nearing $5,000 an ounce. In the cryptocurrency market, Bitcoin climbed back above $70,000 after a period of decline.
