Japanese stocks posted significant gains today, with the Nikkei 225 index rising 3.89 percent to a record 56,363.94 points. The ruling Liberal Democratic Party (LDP) of Prime Minister Sanae Takaichi achieved a landslide election victory over the weekend, raising investors’ hopes for expansionary fiscal policy, according to the Kyodo news agency. The broader Topix index added 2.29 percent to close at 3,783.57 points, also a record high.
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Japanese government strengthened, market still has growth potential, analysts say
“Overall, the LDP government has changed from a very weak government that really couldn’t do anything to an extremely strong government that now has a majority in the lower house of parliament and can really make decisions,” Neil Newman, an analyst at Astris Advisory Japan, told the AP.
“The stock market did not fully reflect the election results, leaving room for further growth,” analyst Makoto Sengoku of Tokai Tokyo Intelligence Laboratory told Kyodo.
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Strengthened only after sell-off
In contrast, the Japanese yen briefly faced a sell-off amid concerns about the possible negative impact of expected increases in government spending. The US dollar briefly climbed to 157 yen.
Deputy Finance Minister AcuÅ¡i Mimura subsequently said that the government would monitor exchange rate movements “as usual with a high degree of urgency,” which reversed the situation on the foreign exchange markets. Around 10:00 CET, the dollar was down 0.4 percent against the yen at 156.54 JPY.
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Source: ÄŒTK
