The Nikkei 225 surged 2% to above 48,500 while the Topix Index climbed 1.2% to 3,210 on Monday, rebounding from the prior session’s losses as investors positioned for Japan’s leadership vote on Tuesday that will decide the country’s next prime minister.
Sentiment improved after the ruling Liberal Democratic Party and the Japan Innovation Party agreed to form a coalition government, paving the way for Sanae Takaichi to become Japan’s first female premier.
The so-called “Takaichi trade,” fueled by expectations of stronger fiscal stimulus and continued monetary easing, drove buying in equities and selling in domestic bonds and the yen.
Gains were broad-based, led by major names including SoftBank Group (+2.8%), Tokyo Electron (+2.9%), Lasertec (+3.3%), Mitsubishi Heavy Industries (+1.2%), and Mitsubishi UFJ (+1.1%).
AloJapan.com