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World Shares Rally After Japan Election02/09 04:48
World shares advanced and Tokyo's Nikkei 225 share index jumped as much as
5% to a record on Monday after Japanese Prime Minister Sanae Takaichi's
governing party secured a two-thirds supermajority in a parliamentary election.
BANGKOK (AP) -- World shares advanced and Tokyo's Nikkei 225 share index
jumped as much as 5% to a record on Monday after Japanese Prime Minister Sanae
Takaichi's governing party secured a two-thirds supermajority in a
parliamentary election.
In early European trading, Germany's DAX gained 0.6% to 24,864.59, while the
CAC 40 in Paris edged 0.2% higher, to 8,288.06. Britain's FTSE 100 was up 0.3%
at 10,399.61.
U.S. futures edged higher after the U.S. stock market roared back on Friday
as technology stocks recovered much of their losses from earlier in the week
and bitcoin halted its plunge. The future for the S&P 500 added 0.1%, while
that for the Dow Jones Industrial Average was up 0.2%.
On Friday, the S&P 500 rallied 2% for its best day since May. The Dow
industrials soared 2.5%, topping the 50,000 level for the first time. The
Nasdaq composite leaped 2.2%.
The combination of a rebound in tech shares, Wall Street's rally and other
upbeat news lifted shares early Monday.
In Tokyo, the Nikkei 225 closed 3.9% higher at 56,363.94. Earlier in the day
the benchmark hit a new intraday record of 57,337.07.
The dollar weakened slightly against the Japanese yen, trading at 156.71
yen, down from 157.10 yen late Friday.
The landslide election victory gives Takaichi a much stronger mandate to
pursue market-friendly policies.
NHK, citing results of vote counts, said Takaichi's Liberal Democratic
Party, or LDP, alone secured 316 seats by early Monday, comfortably surpassing
a 261-seat absolute majority in the 465-member lower house, the more powerful
of Japan's two-chamber parliament. That marks a record since the party's
foundation in 1955 and surpasses the previous record of 300 seats won in 1986
by late Prime Minister Yasuhiro Nakasone.
"So overall, as the LDP has gone from a very weak government that really
couldn't do anything to an extremely strong government now with the
supermajority of the lower house, they really could call the shots," said Neil
Newman, managing director and head of strategy at Astris Advisory Japan.
Takaichi's first major task when the lower house reconvenes in mid-February
is to work on a budget bill, delayed by the election, to fund economic measures
to address rising costs and sluggish wages.
"Japan just delivered the kind of election result markets instinctively
embrace because it removes the one thing traders price at a premium: political
ambiguity," Stephen Innes of SPI Asset Management said in a commentary.
"Politically, the win hands Prime Minister Takaichi freedom of movement and
removes the need to bargain every decision down to the lowest common
denominator," he said.
Other markets across Asia also rallied.
In Seoul, the Kospi gained 4.1%, to 5,298.04, buoyed by strong buying of
tech shares.
Hong Kong's Hang Seng index climbed 1.8% to 27,027.16 and the Shanghai
Composite index rose 1.4% to 4,123.09. Taiwan's Taiex gained 2%.
In Australia, the S&P/ASX 200 surged 1.9% to 8,870.10.
Gains for computer chip companies helped drive Wall Street's widespread
rally on Friday. Nvidia jumped 7.8% and Broadcom climbed 7.1%.
The S&P 500 still fell to its third losing week in the last four. Apart from
worries about spending by Big Tech companies, which are Wall Street's most
influential stocks, concerns about AI potentially stealing customers from
software companies also hurt the market. Software stocks were hit particularly
hard after AI firm Anthropic released free tools to automate things like legal
services.
In other dealings early Monday, bitcoin gained 1% to trade just below
$70,000. A weekslong plunge sent it to close to $60,000 late Thursday, more
than halfway below its record price set in October.
Prices in the metals market have calmed a bit following their own wild
swings. Gold rose 1.4% to $5048.90 per ounce, while silver added 6.2% to $81.64.
U.S. benchmark crude oil shed 60 cents to $62.95 per barrel. Brent crude,
the international standard, gave up 60 cents to $67.45 per barrel.
The euro rose to $1.1866 from $1.1814.
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