"The Nikkei 225 index closed up 1.45%, and the TOPIX index climbed to a record peak. The market's optimism stemmed from the surprise weekend resignation of Prime Minister Shigeru Ishiba. Investors are betting that the next leader from the ruling Liberal Democratic Party (LDP) could unleash a new wave of fiscal stimulus to bolster the economy. This prospect ignited a rally in equities."
"However, the anticipation of increased government spending pressured the Japanese yen. The currency weakened against the US dollar. A weaker yen could provide a powerful tailwind for Japan's crucial export sector. Adding to the bullish sentiment was a positive global backdrop. Following weaker-than-expected US jobs data, traders are now increasingly pricing in an interest rate cut by the Federal Reserve as early as this month. This has encouraged a "risk-on" mood worldwide, benefiting equity markets, including Japan's."
Japanese equity benchmarks advanced sharply, with the TOPIX reaching an all-time high and the Nikkei 225 closing up 1.45%. Market optimism followed the surprise weekend resignation of Prime Minister Shigeru Ishiba, prompting investor bets that a new Liberal Democratic Party leader could introduce sizable fiscal stimulus. Expectations of greater government spending weakened the yen against the US dollar, lifting prospects for export competitiveness. Weaker-than-expected US jobs data increased odds of a near-term Federal Reserve rate cut, fuelling a global risk-on mood that supported equities. Attention now centers on the upcoming LDP leadership race and candidates' fiscal and monetary stances.
Read at London Business News | Londonlovesbusiness.com
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