Low angle view of tall buildings in Tokyo, Japan showing various architectural styles
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Japan’s Nikkei 225 index hit 58,000 for the first time in history on Thursday, extending its post-election rally to new highs fueled by renewed confidence in the ruling administration’s domestic policy and economic agenda.
The benchmark index then pared gains and was trading slightly higher at 57,663. The broader Topix advanced 0.68%.
Japanese stocks have hit several new highs in recent days, fueled by the so-called “Takaichi Trade”, following Prime Minister Sanae Takaichi’s landslide victory in the Lower House, market watchers said.
Global investment firm GMO noted that Takaichi’s landslide early election victory gives him an exceptionally strong multi-year mandate to implement policies it sees as broadly favorable to Japan’s markets and business sector.
While stocks have recovered and bond investors appear reassured, GMO notes that intervention risks could increase if the yen approaches 160 against the greenback.
Other markets in Asia also shrugged off better-than-expected U.S. jobs data, which dampened expectations of a Federal Reserve rate cut and sent U.S. stocks lower overnight.
South Korea’s Kospi jumped 2.1% to a record high of 5,466.9 points, before paring its gains to trade 1.82% higher. The small-cap Kosdaq traded relatively flat.
Singapore’s benchmark index crossed the 5,000 mark for the first time.
Australia S&P/ASX200 was up 0.42% at the start of the session.
that of Hong Kong Hang Seng Index lost 0.23%, while mainland China’s CSI 300 index added 0.12%.
Overnight in the United States, the Dow Jones Industrial Average ended a three-game winning streak after a better-than-expected match January Jobs Report.
The blue-chip index lost 66.74 points, or 0.13 percent, and closed at 50,121.40. THE S&P500 was almost stable at 6,941.47. THE Nasdaq Composite fell 0.16% to end at 23,066.47.
The Bureau of Labor Statistics’ January nonfarm payrolls report showed employment growth of 130,000 in January. Economists surveyed by Dow Jones estimated the gains at 55,000. Employment growth in December was revised down to 48,000.
Strength in the labor market has reduced the chances of an interest rate cut by Federal Reserve.
The jobs report follows weaker-than-expected consumer data released Tuesday. This report showed that consumer spending in December remained stablemissing the 0.4% monthly gain expected by economists surveyed by Dow Jones.
—CNBC’s Sean Conlon and Liz Napolitano contributed to this report.