Nikkei Hits Record High as Takaichi Win Fuels Stimulus Hopes
Japanese stocks led gains across Asian markets on Monday, with the Nikkei 225 soaring to an all-time high after Sanae Takaichi’s election victory fueled optimism for fiscal stimulus and increased government spending.
The rally came as the yen weakened sharply, boosting major exporters and helping lift Japanese equities. Outside Japan, however, most Asian markets traded flat, with China and South Korea closed for public holidays. In Hong Kong, stocks fell amid a pullback in technology shares.
Regional sentiment followed the upbeat tone from Wall Street, where U.S. stocks posted strong weekly gains despite concerns over the ongoing government shutdown. In Asian trade, S&P 500 futures edged 0.2% higher on Monday.
Market focus remains on when the U.S. shutdown will end, as the delay in economic data releases has clouded the outlook for upcoming Federal Reserve decisions.
🇯🇵 Nikkei Surges Over 4% to Record High on Takaichi’s Leadership Win
The Nikkei 225 index jumped 4.5% to a record 48,004.0 points, while the TOPIX gained 3%, reaching 3,232.12 points.
Industrial stocks led the rally on expectations that Prime Minister-elect Takaichi will push for higher fiscal spending on industrialization and defense, while financials lagged amid expectations of slower interest rate hikes.
Takaichi won the Liberal Democratic Party (LDP) leadership in a weekend run-off and is now poised to become Japan’s first female prime minister. Parliament is expected to confirm her appointment in mid-October.
Among the top contenders, Takaichi was viewed as the most dovish, favoring tax relief and government spending to support Japan’s fragile economy. Markets widely expect her to discourage the Bank of Japan (BOJ) from tightening monetary policy further, fueling hopes of expansionary economic measures.
The yen’s weakness on Monday further boosted the export-heavy Nikkei, enhancing earnings prospects for major Japanese manufacturers.
🌏 Asian Stocks Mixed as Hong Kong Tech Shares Retreat
Across the region, Asian stocks traded mixed after last week’s strong performance. Hong Kong’s Hang Seng Index fell 0.5%, weighed down by profit-taking in technology shares following strong gains driven by AI optimism.
Chipmakers were key beneficiaries of this AI-driven rally, supported by OpenAI’s new partnerships with Samsung and SK Hynix. Growing expectations of U.S. rate cuts also helped sustain positive sentiment in the tech sector.
Elsewhere, Singapore’s Straits Times Index added 0.1%, while Australia’s ASX 200 traded flat. In India, the Nifty 50 rose 0.2%, approaching the 25,000 mark after a recent pullback linked to U.S. trade tariffs and domestic growth concerns.
