Tokyo Stocks Hit High As Japan’s Prime Minister Wins Election

Japanese stocks surged to a record high on Monday following Prime Minister Sanae Takaichi’s decisive victory in a snap parliamentary election.

The strong performance in Japan helped lift sentiment across Asia, while European and U.S. markets also closed higher despite intermittent weakness. The Dow continued its upward trend, nudging to a second consecutive record after surpassing 50,000 points for the first time on Friday.

Takaichi’s Liberal Democratic Party secured roughly a two-thirds majority in the lower house, paving the way for potentially aggressive fiscal stimulus and substantial tax cuts.

Financial markets remain cautious about Japan’s public finances and massive debt, especially if Takaichi proceeds with tax reductions and increased spending. However, investor optimism drove the benchmark Nikkei 225 past 57,000 points for the first time, with the yen also strengthening.

“A big victory was expected but this is probably even more impressive,” said Jim Reid, managing director at Deutsche Bank. “The ‘supermajority’ has raised the prospects of even more aggressive policy, including fiscal plans,” he added.

Elsewhere in Asia, Hong Kong and Shanghai markets closed higher, and Seoul rose more than four percent, buoyed by a six-percent jump in Samsung shares after reports that the company would begin mass production of next-generation HBM4 memory chips.

Bangkok gained over three percent following a major election win for caretaker Prime Minister Anutin Charnvirakul’s conservative Bhumjaithai Party, which boosted investor confidence in political stability.

In Europe, UK bond yields rose as Prime Minister Keir Starmer worked to stabilize his premiership amid growing scrutiny over the Labour government’s involvement in the Jeffrey Epstein scandal.

“A political risk premium is once again being built up in UK asset prices, as the market fears what a new leader could bring to the table in terms of economic policy,” said Kathleen Brooks, research director at trading group XTB.

Starmer stated Monday that he would not “walk away,” despite calls from Scottish Labour leader Anas Sarwar for his resignation after appointing Peter Mandelson as U.S. ambassador, knowing of his past connections to Epstein.

Analysts noted that caution still dominates the tech sector, amid concerns about heavy AI investments and uncertainty over when these projects will yield returns.

Economic data this week includes U.S. retail sales, employment, and inflation figures.

In corporate news, shares of Novo Nordisk jumped 5.3 percent in Copenhagen after it filed a lawsuit against Hims & Hers to block the sale of lower-priced versions of its weight-loss drugs Wegovy and Ozempic. Hims & Hers shares dropped 16 percent.