Japanese stocks have reached a new record high, driven by the election of Sanae Takaichi, a pro-stimulus advocate, to lead the country’s ruling party. The Nikkei 225 index surged almost five percent on Monday and continued to rise on Tuesday, while the yen held its losses. Takaichi’s victory has removed uncertainty about the country’s policy direction, with her expected to continue a blend of fiscal support and ultra-easy monetary policy.
This development has led to increased optimism among investors, who are questioning the likelihood of the Bank of Japan continuing its interest rate hikes. Yields on 30-year Japanese bonds have hit their highest level, reflecting fears that the country’s already substantial debt will increase further. The announcement of a partnership between Advanced Micro Devices and OpenAI to develop AI data centers has also contributed to the buying sentiment.
The tech sector has led the global advance this year, with several markets hitting record highs. Tokyo-listed companies such as Advantest, Renesas, and SoftBank have seen significant gains, while TSMC in Taipei has also jumped. The gains have been felt across most of Asia, with Singapore, Wellington, Taipei, Manila, and Jakarta all experiencing increases.
In other markets, gold has reached a fresh peak of $3,977.44, driven by the US government shutdown and uncertainty over the Federal Reserve’s interest rate decision. The shutdown, which is expected to last several weeks, has led to increased bets on the Federal Reserve cutting interest rates. The crypto market has also seen significant gains, with bitcoin hitting a record high of $126,251.
The current market trends are being closely watched by investors, who are seeking to navigate the complexities of the global economy. The US government shutdown, French political upheaval, and Japanese monetary policy are all contributing to a sense of uncertainty, which is driving investors to seek safe-haven assets such as gold. As the situation continues to evolve, investors will be looking for signs of stability and direction from policymakers.
Key figures at 0230 GMT include the Tokyo Nikkei 225 index, which is up 0.7 percent at 48,264.98, and the euro/dollar exchange rate, which is down at $1.1703. The pound/dollar exchange rate is also down, at $1.3480, while the dollar/yen exchange rate is up at 150.38 yen. West Texas Intermediate crude oil is up 0.1 percent at $61.74 per barrel, and Brent North Sea crude oil is up 0.1 percent at $65.54 per barrel.