In Tokyo, investors have found fresh conviction in the political outcome that now shapes Japan’s near-term direction. The Nikkei 225 vaulted to an all-time high as markets digested Sanae Takaichi’s leadership victory, an event interpreted as the beginning of a more assertive fiscal era.
Export-heavy names, particularly within industrials, machinery, and technology, surged as the yen weakened sharply against the dollar. A softer currency signals that rate hikes are unlikely in the near term. Domestic cyclicals joined the rally on expectations of stronger internal demand once fiscal measures begin to filter through the economy.
Long-dated Japanese government bond yields rose on speculation of increased issuance to finance broader spending, while shorter-term yields slipped as markets priced out early policy tightening.
Equities in South Korea, Taiwan, and Hong Kong advanced as investors read Japan’s stance as a regional signal that policy momentum could remain supportive of growth.
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