Japanese stock market benchmark, Nikkei, surpasses 44,000 points for the first time, fueled by optimism surrounding international trade and spending.
The Japanese market experienced a surge in optimism this week, with the Nikkei share average climbing past 44,000 for the first time on Tuesday, reaching a record high of 44,018.78. The rise in the market was driven by trade and potential increases in stimulus spending, following the resignation announcement of Prime Minister Shigeru Ishiba.
Despite the resignation, no specific date was given, leaving the future leadership of the Liberal Democratic Party (LDP) and the country uncertain. However, Sanae Takaichi, a proponent of government stimulus and monetary easing, has announced her candidacy for the LDP's leadership race.
The broader Topix Index also saw an increase of 0.4 per cent, with the Nikkei 225 Index reaching a record high. The strong gains in the market continued from Monday, with the Nikkei index boasting 144 advancers compared to 77 decliners.
Among the top performers in the Nikkei index, Advantest experienced the largest percentage gain, with a 6.7 per cent increase. Tokuyama was the second-largest percentage gainer, with a 5 per cent increase. On the other hand, Takeda Pharmaceutical was the second-largest loser, with a 2.4 per cent decrease. The largest loser was Citizen Watch, which saw a 5.8 per cent decrease following the announcement of its removal from the Nikkei index in October.
The market's positive sentiment was further boosted by the news of U.S. tariffs on Japanese autos being lowered, with the tariff reduction set to take effect on September 16. This development clarified the ambiguity that existed after July.
The Kyodo news agency reported the decision of Sanae Takaichi to run in the leadership race based on sources familiar with the matter. However, the identified candidate who has announced running for the leadership of the Liberal Democratic Party of Japan is not explicitly stated in the search results. Prominent Japanese politician Yukio Edano, associated with opposition parties, has not yet directly announced his candidacy for the LDP leadership in 2025.
The announcement about the trade deal has brought a sense of certainty to the market, contributing to the overall positive sentiment. As the race for the LDP leadership unfolds, investors will be closely watching developments to gauge their impact on the Japanese economy.
