Japanese shares rise after weekend election
Tokyo stocks closed 0.94 per cent higher yesterday after Japan’s conservative opposition swept to victory in national polls, with promises from its leader to press for more central bank easing.
The benchmark Nikkei 225 index added 91.32 points to 9,828.88, while the broader Topix index of all first-section shares rose 0.85 per cent, or 6.80 points, to 807.84.
Investors cheered the return to power of the business-friendly Liberal Democratic Party as the yen plunged on speculation of more central bank easing, boosting exporters’ shares in the wake of Sunday’s thumping LDP win.
The result also sent utility shares soaring with Fukushima operator Tepco skyrocketing nearly 33 per cent as the win signalled that any short-term plans to ditch atomic power will likely be shelved.
The LDP is viewed as more pro-nuclear than the ousted Democratic Party of Japan, which had pledged to work towards a nuclear-free country in the wake of last year’s atomic crisis.
Hawkish LDP head Shinzo Abe had pledged to put Japan’s moribund economy back on track after years of deflation, made worse by a soaring currency that has squeezed exporters.
Topping his agenda was a promise to pressure the Bank of Japan (BoJ), which holds a policy meeting this week, into more aggressive easing policies aimed at kickstarting growth as the world’s third-largest economy slips into recession.
“It’s a relief rally; the vote count was pretty much as expected,” said Naoki Fujiwara, fund manager at Shinkin Asset Management.
“The weaker yen is more of a factor, based on expectations of a more compliant BoJ for policy easing,” he told Dow Jones Newswires.
In Tokyo trade, Nissan Motor was up 1.78 per cent to 799 yen and Sony rose 1.43 per cent to 919 yen.
Tokyo Electric Power (Tepco) rocketed 32.89 percent to 202 yen by the close, Chubu Electric Power jumped 9.59 per cent to 1,188 yen and Kansai Electric was up 17.64 per cent at 920 yen.
Financials also gained with Nomura Holdings up three per cent at 377 yen, and construction giant Obayashi rising 2.09 per cent to 439 yen.
On currency markets, the dollar bought 84.05 yen, up from 83.52 yen in New York on Friday, while the euro was at 110.58 yen, from 109.94 yen in US trade.