Nikkei 225 Jumps 5.7 Percent to Record After Sanae Takaichi Election Victory

Asian equity markets opened the week on a strong note on Monday, tracking gains on Wall Street after a volatile stretch driven by concerns over lofty technology valuations. Investor sentiment improved following a broad-based rally in US stocks on Friday, setting the tone for risk-on trades across the Asia-Pacific region at the start of a critical trading week.

Japan led regional gains, with the Nikkei 225 Index surging as much as 5.7% to a record high after Prime Minister Sanae Takaichi secured a historic election victory. The outcome raised expectations of looser fiscal policy and additional stimulus, boosting confidence in Japanese equities. South Korea’s Kospi Index climbed more than 4%, supported by continued enthusiasm around artificial intelligence-linked stocks.

US equity-index futures edged higher after major Wall Street benchmarks rose about 2% on Friday, helped by dip-buying and a rotation into cyclical stocks. The Dow Jones Industrial Average closed at a record 50,000, while Bitcoin also recovered part of its recent losses. Meanwhile, yields on 10-year US Treasuries rose by nearly two basis points, reflecting shifting expectations around growth and inflation.

Also Read: PM Takaichi Vows to Resign if LDP-Ishin Coalition Loses Majority in Snap Election

Commodities were mixed, with gold and silver rising at the open despite remaining below record highs. Brent crude slipped around 1% as geopolitical tensions in the Middle East showed signs of easing. In currency markets, the Japanese yen fluctuated as investors assessed the implications of Japan’s election outcome, while the nation’s 10-year government bond yield rose about five basis points.

Market participants said the rebound reflected bargain-hunting after last week’s selloff and a continuation of the rotation away from technology stocks. Analysts noted that the combination of Wall Street’s rebound and political clarity in Japan provided short-term support for Asian markets, though questions remain over valuations and the sustainability of demand tied to artificial intelligence investment.

Looking ahead, investors are bracing for a data-heavy week in the United States, including payrolls and inflation figures that could shape expectations for future Federal Reserve policy moves. With traders pricing in a low probability of an interest-rate cut next month, markets are expected to remain sensitive to economic signals and policy guidance in the days ahead.

Also Read: How Sanae Takaichi Won Japan's Young Voters as First Female Prime Minister