Japan’s Nikkei surges to record after election win by fiscal dove Takaichi

By Junko Fujita and Rocky Swift

Tokyo (Reuters) – The Japan Nikkei sharing gauge exceeded the level of 46,000 for the first time on Monday after Dove Sanae Takaichi was elected to lead the party to power and become the next Prime Minister.

The Nikkei 225 index jumped from 2.8% to 47,061.07 at the start of trade, while the wider topix increased by 2.1%.

The yield on the two -year Japanese government’s obligation fell from 5 basic points (BPS) to 0.89%, reflecting the expectations of subsequent rate increases by the central bank. The yen slipped by more than 1% compared to the dollar and the euro.

Takaichi, 64, was considered to have the most expansionist tax and monetary program among five candidates in the breed of the Liberal Democratic Party to replace Prime Minister Shigeru Ishiba.

In the LDP race race, a “Takaichi trade” has emerged – for a long time on the actions and lowering on the obligations of the Japanese government, in particular longer deadlines – the positioning for a victory of the veteran legislator which is a devotee of the stimulation policies “Abenomics” of the late Shinzo.

(Report by Junko Fujita and Rocky Swift; edition by Sam Holmes)