Asia report: Tokyo jumps as Takaichi secures election victory

(Sharecast News) - Asia-Pacific equity markets advanced on Monday, led by sharp gains in Japan after prime minister Sanae Takaichi secured a historic election victory that investors viewed as supportive of growth-oriented economic policy.

Japan's Nikkei 225 briefly crossed the 57,000 mark for the first time during the session before closing up 3.89% at 56,363.94, while the broader Topix rose 2.29% to 3,783.57.

The rally came as broader risk appetite improved across the region, with Patrick Munnelly, market strategy partner at TickMill, noting that "Asian markets soared to record highs as risk assets, including tech stocks and Bitcoin, rallied following Wall Street's strong finish last Friday," adding that the MSCI Asia Pacific Index "surged by 2.4%, hitting an all-time peak."

Tokyo surges after weekend election

Japanese stocks surged after public broadcaster NHK reported that the ruling Liberal Democratic Party had captured a two-thirds supermajority in the 465-seat lower house.

Furukawa Electric jumped 20.69%, Kawasaki Heavy Industries gained 15.73% and Advantest climbed 11.52%.

Analysts said the so-called 'Takaichi trade' had driven Japanese stocks to repeated highs in recent months, on expectations her policies would extend Abenomics-style growth while favouring looser monetary conditions and higher government spending.

Munnelly highlighted the scale of the move, saying the Nikkei "climbed an impressive 5.7% after prime minister Takaichi's groundbreaking election victory," while pointing to renewed momentum across equities, precious metals and cryptocurrencies.

US president Donald Trump congratulated Takaichi on her victory in a Truth Social post.

Chinese shares stronger

Chinese equities also strengthened, with the Shanghai Composite rising 1.41% to 4,123.09 and the Shenzhen Component climbing 2.17% to 14,208.44.

Quzhou DFP New Material Group gained 10.12%, Hang Xiao Steel Structure rose 10.11% and HNA Technology added 10.1%.

In Hong Kong, the Hang Seng Index advanced 1.76% to 27,027.16, led by Innovent Biologics up 7.42%, Pop Mart International Group up 5.76% and Zijin Mining Group up 5.58%.

The advance reflected what Munnelly described as improving global momentum after "US indices gained around 2% on Friday, recovering some of their earlier losses," with optimism spilling over into Asian markets.

South Korean markets posted some of the region's strongest gains, with the Kospi 100 jumping 4.41% to 5,984.74.

Amorepacific surged 20.25%, Hanwha Solutions rose 13.57% and Mirae Asset Daewoo Securities gained 11.25%.

Munnelly said the Kospi Index, "a favourite for AI-focused investments," jumped 4.2%, underscoring renewed appetite for technology-linked risk assets.

Sydney and Wellington manage gains

In Australia, the S&P/ASX 200 climbed 1.85% to 8,870.10, with CAR Group up 9.93%, Regis Resources up 9.27% and DroneShield up 8.62%.

New Zealand stocks were little changed, with the S&P/NZX 50 edging up 0.02% to 13,446.37, though Pacific Edge jumped 10.22%, Skellerup Holdings rose 8.08% and Vista Group International added 4.97%.

Dollar mixed against regional currencies, oil prices higher

In currency markets, the dollar weakened 0.34% on the yen to trade at JPY 156.69.

Munnelly said traders were "closely watching the yen's performance, especially after it hit its weakest point since 2024 earlier this year at 159.45 per dollar," noting that fluctuations in Japanese government bond yields had added to market intrigue following the election result.

The Aussie strengthened, with the greenback down 0.13% at AUD 1.4241, while the Kiwi eased, with the US dollar up 0.2% at NZD 1.6656.

Oil prices were modestly higher, with Brent crude futures last up 0.31% on ICE at $68.26 per barrel and the NYMEX quote for West Texas Intermediate rising 0.39% to $63.80.

Reporting by Josh White for Sharecast.com.