The Liberal Democratic Party’s election victory sparked a surge in broad-based buying of stocks in early Monday trading in Japan.
Tokyo’s benchmark Nikkei 225 stock index at one stage surged over 3,000 points, or 5.6 percent. It topped the 57,000 mark to set an all-time intraday high.
Stock prices had risen ahead of the election, with investors encouraged by what Prime Minister Takaichi Sanae calls her “responsible proactive fiscal policy.”
In currencies, the Japanese yen fluctuated in choppy trading. It recently moved in the 156-yen range against the dollar on the Tokyo Foreign Exchange Market.
The yield on the benchmark 10-year government bond edged higher in reaction to the election. The market forecasts an increase in bond sales to help fund expected LDP policies to increase spending.
Fiscal spending and potential cuts in the consumption tax are now the focus of investors. Those issues are likely to shape the next trend in Japan’s financial markets.
