Japanese stocks hit record high amid election and US shutdown

Japanese stocks have hit a new record high after Sanae Takaichi, a pro‑stimulus candidate, was elected to lead the ruling party. The Nikkei 225 surged almost 5 % on Monday and kept climbing on Tuesday, while the yen continued to weaken. Takaichi’s victory removes uncertainty about Japan’s policy direction; she is expected to maintain a mix of fiscal support and ultra‑easy monetary policy. This has boosted investor optimism and raised questions about whether the Bank of Japan will keep raising interest rates.

Yields on 30‑year Japanese bonds have risen to their highest level, reflecting concerns that the country’s already large debt could grow further. At the same time, news of a partnership between Advanced Micro Devices and OpenAI to build AI data centers has added to the buying sentiment. The tech sector has led global advances this year, with several markets reaching record highs. Tokyo‑listed firms such as Advantest, Renesas and SoftBank have posted strong gains, and TSMC in Taipei has also jumped. The rally has spread across most of Asia, lifting markets in Singapore, Wellington, Taipei, Manila and Jakarta.

In other markets, gold has climbed to a fresh peak of $3,977.44, driven by the U.S. government shutdown and uncertainty over the Federal Reserve’s interest‑rate decision. The shutdown, expected to last several weeks, has increased bets on a Fed rate cut. The crypto market has also surged, with Bitcoin hitting a record $126,251. Investors are closely watching these trends as they navigate the complexities of the global economy.

The combination of the U.S. government shutdown, French political turmoil and Japanese monetary policy is creating a sense of uncertainty, prompting investors to seek safe‑haven assets such as gold. As the situation evolves, market participants will look for signs of stability and direction from policymakers. At 02:30 GMT, the Tokyo Nikkei 225 was up 0.7 % at 48,264.98; the euro/dollar was down at $1.1703; the pound/dollar fell to $1.3480; and the dollar/yen rose to 150.38 yen. West Texas Intermediate crude oil edged up 0.1 % to $61.74 per barrel, while Brent North Sea crude rose 0.1 % to $65.54 per barrel.