Japan stocks soar, super-long bonds steady

TOKYO: Japanese stocks swept to all-time peaks while super-long bonds quickly reversed early weakness in an apparent vote of confidence in Prime Minister Sanae Takaichi’s “responsible, proactive” fiscal policy.

The yen initially declined to a record trough against the Swiss franc, but rapidly switched direction after a warning about potential currency intervention from Tokyo.

Takaichi’s Liberal Democratic Party won a landslide 316 of the 465 seats in parliament’s lower house in Sunday’s snap election, giving her a solid mandate to push through big spending and promised tax relief.

But she has repeatedly stressed that her stimulus plans will not blow out the nation’s finances, a major concern for markets given Japan already has the developed world’s heaviest debt burden.

“The result reduces political uncertainty and strengthens the broader ‘Japan is Back’ narrative,” said Masahiko Loo, senior fixed-income strategist at State Street.