TOKYO: Japan’s Nikkei share average rose on Thursday as prospects of Liberal Democratic Party (LDP) leader Sanae Takaichi becoming the next prime minister increased, stoking bets on a revival in big spending and loose monetary policy.
The Nikkei rose 0.87% to 48,088.07 by the midday break, while the broader Topix was up 0.49% at 3,199.18.
The Japan Innovation Party emerged as a possible coalition partner for the LDP after its leader said the party would back Takaichi for the premiership if the two parties agreed on policy.
“Takaichi trade is back,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.
The Nikkei surged to a record high last week after Takaichi was elected as the LDP leader, paving the way for her to become the country’s next prime minister.
But that expectation faded after the LDP’s long-term partner Komeito left the coalition last week.
“The Nikkei could rebound to its high scaled earlier this month. But the yen has strengthened, which is negative for domestic stocks,” Arisawa said.
The yen strengthened against the dollar as US Treasury Secretary Scott Bessent and Japanese finance minister Katsunobu Kato held talks in Washington.
Among stocks that gained in Japan, technology investor SoftBank Group jumped 6.58% and chip-making equipment maker Tokyo Electron gained 3.65%.
Cable maker Fujikura, a gauge for AI data centre investments, rose 1.58%.
Renesas Electronics surged 7.28% after Reuters reported that the chip maker was exploring a sale of its timing division in a deal that could value the business at close to $2 billion.
Shares of Osaka-based property and railway firms gained, buoyed by prospects of Osaka becoming the second capital of Japan - a policy supported by the Japan Innovation Party.
Hankyu Hanshin Holdings rose 4.72% and Keihanshin Building gained 1.9%.
Keihan Holdings rose 3.92%. Uniqlo brand owner Fast Retailing slipped 0.76% to weigh on the Nikkei the most.
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