Nikkei, Bitcoin, and Gold Soar to Record Highs After Takaichi’s Election Victory
Japanese stocks surged more than 5% to a record high on Monday, while the yen weakened sharply, after Sanae Takaichi, a known fiscal and monetary dove, was elected leader of Japan’s ruling party. Her victory positions her to become the nation’s first female prime minister.
At the same time, gold climbed close to $4,000 per ounce, marking another all-time high, while Bitcoin rallied past $125,000 as investors flocked to alternative assets amid growing anxiety over the ongoing U.S. government shutdown.
The Nikkei 225 soared above 48,000 points for the first time ever after Takaichi defeated moderate rival Shinjiro Koizumi in the Liberal Democratic Party (LDP) leadership race, fueling expectations of fresh fiscal stimulus.
The Japanese yen slid as much as 2%, breaking beyond 150 per U.S. dollar, and hit a record low against the euro at 176.25. Concerns over Japan’s fiscal position pushed 30-year bond yields to historic highs, while short-term bond yields fell as traders scaled back bets on the Bank of Japan (BOJ) resuming rate hikes.
Market data now shows the odds of a BOJ rate hike by year-end dropping to 41%, down from 68% just days earlier.
Takaichi, who had previously criticized the BOJ’s rate increases as “stupid,” has since moderated her stance, calling instead for closer coordination between the government and the central bank. Economists at Morgan Stanley MUFG Securities said fears of extreme fiscal expansion are “overblown,” noting that her policies appear closely aligned with BOJ Governor Kazuo Ueda’s cautious approach to normalization.
Elsewhere in the region, Asian markets were mostly closed for public holidays in China, South Korea, and Taiwan. Hong Kong’s Hang Seng Index dipped 0.7%, while Australia’s ASX 200 eased 0.1% in light trading.
In global markets, U.S. S&P 500 futures rose 0.3%, following Friday’s record high close. European stocks remained steady, with STOXX 50 futures flat at record levels.
The U.S. dollar regained ground against the euro and British pound, with the euro slipping 0.26% to $1.1714 and sterling down 0.22% to $1.3440.
Gold was last seen trading near $3,927, slightly below its earlier record of $3,944, while Bitcoin hovered around $123,600 after reaching $125,653 on Sunday.
According to Geoffrey Kendrick of Standard Chartered Bank, the ongoing U.S. shutdown could further lift Bitcoin prices. “Bitcoin has traded closely with U.S. government risks this year,” he noted, predicting a potential rise toward $135,000 during the shutdown.
Meanwhile, oil prices edged higher after OPEC+ announced a 137,000 barrels per day production increase for November, matching October’s modest rise. Brent crude gained 1.3% to $65.36, while U.S. West Texas Intermediate (WTI) climbed 1.3% to $61.69.
