Japan’s Nikkei Surges as Takaichi Win Fuels Spending Hopes
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uxs)pvh7fi94n{[ak)klvsty_media_dl_1.png BloombergArticle content(Bloomberg) — Japanese stocks gained the most since April as Prime Minister Sanae Takaichi’s historic win in Sunday’s election ignited expectations of more government spending in key industries.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe Nikkei 225 benchmark jumped as much as 5.7% to a fresh record of 57337.07 as of 10 a.m. local time, with the broader Topix also up as much as 3.4% to a new peak. Tech and machinery led the climb, with some chip-gear makers rising over 10%.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentTakaichi’s ruling coalition secured an overwhelming majority in Sunday’s lower-house vote, giving her a clear mandate to pursue fiscal expansionary policies that have already driven Japanese stocks to record highs. Sectors seen benefiting from her “strategic” spending plans, including AI, semiconductors, quantum computing and defense, have powered the climb and were among Monday’s best performers.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentTakaichi’s win “far surpassed” initial expectations, and “has the potential to open the floodgates on her expansionary policies,” wrote Andrew Jackson, head of Japan equity strategy at Ortus Advisors, in a note. He expects upside for defense-related stocks like Mitsubishi Heavy Industries Ltd., as Takaichi has pledged to increase security spending, along with space-related names. Article contentFinancial stocks will also win out due to higher long-term bond yields, he added, while food-linked shares may benefit from Takaichi’s election promise of a temporary cut to the consumption tax on food.Article contentDefense manufacturers Mitsubishi Heavy, Kawasaki Heavy Industries Ltd. and IHI Corp. were all strong Monday, with IHI gaining as much as 7.2%. Satellite firm Sky Perfect JSAT Holdings was among the Topix’s best performers, while real estate and construction stocks, also expected to benefit from Takaichi’s policies, were also solid.Article contentArticle contentThe ruling Liberal Democratic Party’s “historic victory gives Prime Minister Takaichi a stable majority, reducing coalition constraints and enabling decisive action on fiscal stimulus, AI, semiconductors, energy security, and strategic reforms,” said Marc Jocum, senior investment strategist at Global X Management. “Markets now have a clear fiscal policy runway through 2028 until the next election.”Article contentChip-gear maker Advantest Corp. was the biggest contributor to the Topix’s gains Monday, rising as much as 15%. Expectations of more AI investment from big tech firms following Amazon.com Inc.’s earnings on Friday are an extra tailwind for Japan’s semiconductor sector “on top of the Takaichi upside,” said Ortus’ Jackson. Article content—With assistance from Carmeli Argana.Article content(Adds chart, updates throughout)Article contentTrending Cuba begins shutting resorts as fuel crunch hits crucial tourism industry PMN Business This TSX top gainer is up 56% this year, with even 'more meaningful upside,' analysts say Investor Posthaste: One sector of Canada's economy is in deep recession — and we can't even blame Trump News Macklem says loss of CUSMA would mean recession for the Canadian economy Economy Garry Marr: As Canada's condo market swoons, private equity is circling Personal Finance Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Cuba begins shutting resorts as fuel crunch hits crucial tourism industry PMN Business This TSX top gainer is up 56% this year, with even 'more meaningful upside,' analysts say Investor Posthaste: One sector of Canada's economy is in deep recession — and we can't even blame Trump News Macklem says loss of CUSMA would mean recession for the Canadian economy Economy Garry Marr: As Canada's condo market swoons, private equity is circling Personal Finance