\n<\/p>\n
Japan\u2019s stock market has hit a record high after Sanae Takaichi\u2019s Liberal Democratic party (LDP) secured a comprehensive victory in Sunday\u2019s election.<\/p>\n
The LDP won 316 of the 465 seats in the country\u2019s lower house \u2013 the first time a single party has secured two-thirds of the chamber since the establishment of Japan\u2019s parliament in 1947.<\/p>\n
The Japan Innovation party, the LDP\u2019s coalition partner, won 36 further seats, giving a supermajority with 352 seats.<\/p>\n
The landslide victory eases the legislative agenda for Takaichi \u2013 who is Japan\u2019s first female prime minister and called a snap election in January \u2013 as she can override the upper chamber, which she does not control.<\/p>\n
Japanese stocks rose, bonds fell and the battered yen recovered some ground on Monday after the LDP\u2019s win was seen as enabling decisive action on fiscal stimulus.<\/p>\n<\/p>\n
Japan\u2019s Nikkei share average rose to a record high on Monday, after the election result, surpassing the 56,000 level for the first time at the start of trading. It quickly pushed through the 57,000-point mark, before closing up 3.9% at 56,363 points.<\/p>\n
In other Asian markets, South Korea\u2019s Kospi rose 4.4%, Hong Kong\u2019s Hang Seng gained 1.8%, and Australia\u2019s S&P\/ASX 200 was 1.9% higher.<\/p>\n
On the currency markets, the yen initially fell 0.3% against the dollar \u2013 its weakest level in two weeks \u2013 before strengthening as much as 0.7%. It was last trading 0.5% firmer at 156.43 yen against the dollar.<\/p>\n
Nikkei 225 chart<\/p>\n
Takaichi hopes to push through a 21tn yen (\u00a399bn) stimulus package, and has promised to suspend Japan\u2019s 8% sales tax on food for two years.<\/p>\n
Investors have balked at the lack of clarity over how Japan, which has the highest debt burden in the developed world, would fund the proposal. The uncertainty has triggered a sell-off in government bonds and pushed the yen towards historic lows against other currencies.<\/p>\n
Some analysts had suggested that Takaichi\u2019s strong mandate might give her leeway to retreat from the plan, with opposition parties advocating even bolder tax cuts suffering heavy defeats at the ballot box. But she pushed back against that view in a series of brief television interviews as results rolled in on Sunday, saying she would move with speed to realise the LDP\u2019s promise to suspend the levy.<\/p>\n
\u201cWhile the initial yen weakness may not have played out, the outlook for the yen is still one which is likely to struggle to strengthen,\u201d said Sim Moh Siong, a currency strategist at OCBC in Singapore. \u201cAt least in the near term, there\u2019s also concern about intervention risk, which may be capping the upside for dollar-yen.\u201d<\/p>\n
Questions remained on Monday over whether the bond market would support Takaichi\u2019s debt-fuelled stimulus spending plans.<\/p>\n
The yield, or interest rate, on 10-year Japanese bonds rose by six basis points \u2013 or 0.06 percentage points \u2013 to 2.282% as bond traders digested the result. The yield on a 30-year Japanese bond rose by four basis points to 3.55%.<\/p>\n
The rises indicate some jitters among traders about Takaichi\u2019s policies. Bond yields move inversely to prices.<\/p>\n
Mahjabeen Zaman, the head of foreign exchange strategy at Australia\u2019s ANZ Bank, said Takaichi\u2019s win \u201creinforces her push for bold spending\u201d. She added: \u201cIn terms of [Japanese bond] yields, we expect them to also move higher, just reflecting higher inflation expectations and a little bit of that fiscal agenda that Takaichi will be pulling through.\u201d<\/p>\n
Fred Neumann, the chief Asia economist at HSBC in Hong Kong, added that while the Japanese PM won a \u201cbig political mandate \u2026 she faces a very potent opposition, or at least a check, in the markets because she has much less room for manoeuvre. If her agenda is deemed fiscally too ambitious, you\u2019ll see very quick reactions in the bond market and the exchange rate markets.\u201d<\/p>\n
Japan was concerned about the rapid moves in foreign exchange markets and was closely monitoring them with a high sense of urgency, the government spokesperson Minoru Kihara told a press conference on Monday.<\/p>\n
The challenge for Takaichi is finding revenue to offset a consumption tax cut, which would cost about 5tn yen a year \u2013 roughly equivalent to Japan\u2019s annual education budget. She has ruled out issuing fresh debt but has remained vague on alternative funding sources, saying details would be worked out through cross\u2011party debates on social welfare and taxation.<\/p>\n
Reuters contributed to this report<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Japan\u2019s stock market has hit a record high after Sanae Takaichi\u2019s Liberal Democratic party (LDP) secured a comprehensive victory in Sunday\u2019s election. The LDP won 316 of the 465 seats in the country\u2019s lower house \u2013 the first time a single party has secured two-thirds of the chamber since the establishment of Japan\u2019s parliament in<\/p>\n","protected":false},"author":1,"featured_media":44126,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[4668,949,70,3241,3556,10498,1099,17440,2228,17195,3518,1975],"class_list":{"0":"post-44125","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-election","9":"tag-high","10":"tag-hit","11":"tag-japan","12":"tag-japanese","13":"tag-landslide","14":"tag-record","15":"tag-sanae","16":"tag-shares","17":"tag-takaichi","18":"tag-victory","19":"tag-wins"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/44125","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=44125"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/44125\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/44126"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=44125"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=44125"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=44125"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}