Japanese stocks hit a record high on Monday, leading the region’s gains after Prime Minister Sanae Takaichi’s historic election victory.
The ruling Liberal Democratic Party secured a two-thirds qualified majority in the 465-seat lower house, public broadcaster NHK reported.
from Japan Nikkei 225 topped 57,000 for the first time before paring gains to close 3.9% higher at 56,363.94, while the Topix also hit a record high, closing at 3,783.94, up 2.3%.
A decisive Takaichi victory could be the “best outcome” for markets in the medium term, as strategic investments and tax reform support stocks, said Sree Kochugovindan, senior research economist at Aberdeen Investments.
Japanese stocks have hit multiple highs in recent months, driven by the so-called “Takaichi trade,” as markets expect the prime minister’s economic policies – seen as a continuation of growth-focused Abenomics – to boost stocks, while weakening the yen as she pushes for looser monetary policy and increased government spending.
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Performance of Japanese stocks over the past year
The Japanese yen strengthened to 156.88 against the dollar. Yields on 10-year Japanese government bonds rose nearly 4 basis points to 2.274%, while yields on Japanese 20-year bonds rose 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 its victory.
US President Donald Trump congratulated Takaichi on his victory in a TruthSocial article.
“She is a well-respected and very popular leader. Sanae’s bold and wise decision to call elections has paid off,” 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 defeat in the Lower House in 2024, which prompted then-Prime Minister Shigeru Ishiba to resign in September.
Other Asian markets also advanced, 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&P/ASX200 rose 1.85%, closing at 8,870.1.
that of Hong Kong Hang Seng Index was up 1.71% in its final hour, while the mainland 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 won a decisive victory in Sunday’s general election.
US futures rose slightly.
Last Friday, in the United States, stocks jumped thanks to the recovery of technology stocks after several days of strong sales in the sector and bitcoin has rebounded from a rout that sent the popular cryptocurrency down more than 50% from its peak in October last year.
THE Dow Jones Industrial Average advanced 1,206.95 points, or 2.47%, closing at 50,115.67. Friday was the first time the Dow Jones surpassed the 50,000 level. THE S&P500 jumped 1.97% and ended at 6,932.30, while the Nasdaq Composite advanced 2.18% to 23,031.21. Thanks to these movements, the S&P 500 is back in the green for 2026.
Even with Friday’s rise, the S&P 500 was down 0.1% for the week, while the Nasdaq fell 1.8% for the week. The 30-stock Dow Jones is up 2.5% so far this week, benefiting from some rotation into some economically cyclical stocks, even as the broader market was weighed down by technology sales.
—CNBC’s Sean Conlon and Alex Harring contributed to this report.
