Japan’s equity market soared to historic levels on Tuesday, as investors returned from a public holiday and responded to Wall Street’s recent robust performance.
The Nikkei 225 Index climbed as much as 3.6%, touching an all-time high of 53,814.79, and held close to that level in early trading. The wider Topix index also set a new record, rising as much as 2.4% to 3,599.31.
A global upswing in sentiment, following consecutive record closes for the Dow Jones Industrial Average and the S&P 500 in the United States—where technology stocks led the advance—contributed to the rally in Tokyo. Investors in Japan appeared to shrug off concerns about the U.S. Justice Department’s criminal probe into Federal Reserve Chair Jerome Powell.
Market optimism was further buoyed by speculation that Prime Minister Sanae Takaichi may call an early general election to strengthen her coalition government’s grip on parliament, raising expectations for an increase in fiscal expenditure.
Reports from domestic media had previously indicated an election could be announced as early as next month—potentially Takaichi’s first test at the polls since taking office in October.
According to Maki Sawada, an equities strategist at Nomura Securities, “Market consensus is that dissolving parliament would likely result in a weaker yen, higher stocks, and softer bond prices,” driven by the prospect of “early elections meaning more proactive government spending.”
The rally was broad, with 209 out of the Nikkei’s 225 constituents posting gains, while just 16 declined. Automotive giants benefited as Toyota Motor surged 5.1% and Subaru advanced 4.1%. Chip-related stocks led the market’s gains, with Advantest jumping 8.4% and Tokyo Electron climbing 7.7%.
