Japanese shares jumped to a record high on Monday, leading gains in the region after Prime Minister Sanae Takaichi scored a landmark election victory.
The ruling Liberal Democratic Party won a two-thirds majority in the 465-seat lower house, public broadcaster NHK reported.
Japan’s Nikkei 225 jumped 5.6% to 57,337 points, while the Topix rose more than 3%, also hitting a record high.
A decisive victory for Takaichi could be the “best outcome” for markets in the medium term, as strategic investments and tax reform boost stocks, said Sree Kochugovindan, senior research economist at Aberdeen Investments.
Japanese shares have hit several highs in recent months, boosted by the so-called “Takaichi trade”, as markets expect the prime minister’s economic policies – seen as a continuation of growth-oriented Abenomics – to boost stocks while weakening the yen as she advocates looser monetary policy and more government spending.
The real estate sector led Nikkei gains, rising more than 7%, followed by the healthcare and industrials sectors, LSEG data showed as of 8:11 p.m. ET on Sunday, SEEbiz reports.
Japanese internet firm CyberAgent Inc was the index’s top gainer, rising over 16%. Semiconductor equipment maker Advantest rose over 12%, followed by Sumitomo Electric Industries, which recorded a gain of over 11%.
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 20-year Japanese government bonds added about 3 basis points to 3.158%.
The Takaichi administration has gained stronger momentum for a major shift towards proactive fiscal policy, backed by a clear public mandate, Crédit Agricole CIB reiterated in a note following her victory.
US President Donald Trump congratulated Takaichi on his victory in a post on TruthSocial.
“She is a highly respected and highly popular leader. Sanae’s brave and wise decision to call the election has paid off big,” he wrote. “The wonderful people of Japan, who voted with such enthusiasm, will always have my strong support.”
The election follows political turmoil last year, when the LDP lost its upper house majority, and a defeat in the lower house in 2024, prompting then-Prime Minister Shigeru Ishiba to resign in September.
