TOKYO: pan’s Nikkei share average secured a second day of gains on Tuesday, as investors bought back shares after domestic election worries sparked a selloff last week.
Prime Minister Shigeru Ishiba’s coalition lost its parliamentary majority in Sunday’s election in what analysts say is a negative for equities as it raises uncertainty over the path ahead for policy and the economy.
But the market’s focus appears to have moved on from domestic political jitters for now, given an already sizeable fall in shares last week as investors priced in the election risk scenario.
The Nikkei ended up 0.8% at a one-week closing high of 38,903.68 after rising nearly 2% in the previous session, while the broader Topix finished 0.9% higher at 2,682.02.
“Equities prices have declined significantly enough ... Now the market is waiting for other big events like the job report and the US presidential election,” said Kenji Abe, chief strategist at Daiwa Securities.
Financial shares rallied on Tuesday, tracking their US peers’ gains as US Treasury yields continued to rise, partly due to speculation that Republican former President Donald Trump could win the Nov. 5 presidential election.
Banks and security firms both climbed 2.5% to lead sector gains.
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