Nikkei, Topix race to record close on earnings, ‘Takaichi trade’ optimism

TOKYO: Japan’s Nikkei share average closed at a record high on Tuesday, following robust quarterly earnings and momentum from Prime Minister Sanae Takaichi’s landslide victory in the general election.

The Nikkei 225 Index ended Tuesday’s session up 2.3% to 57,650.54 while the broader Topix, which also closed at a record high, advanced 1.9% to 3,855.28.

Earnings season is underway in the world’s fourth-largest economy, and markets are buoyed by expectations that Takaichi’s overwhelming victory on Sunday would enable her to push through big spending and tax relief.

“Following the ruling coalition’s landslide victory in the general election, expectations for proactive fiscal policy are rising, and hopes for an economic boost are spreading in the domestic stock market,” said Takayuki Miyajima, a senior economist at Sony Financial Group.

The Nikkei is up 12% so far this year, supported by hopes of fiscal stimulus under Takaichi and a global tech rally that has boosted semiconductor and artificial intelligence-linked shares.

Shares of cable maker Furukawa Electric reached their daily upper limit after the company reported solid earnings on Monday, rising 22.3% on Tuesday and gaining a whopping 49.6% over the past three sessions. Mazda Motor shares jumped 12%, the biggest daily gain since last July, after reporting better-than-expected results.

Meanwhile, SoftBank Group, seen as a bellwether for artificial intelligence  sentiment in Japan, provided thebiggest lift to the Nikkei, gaining 10.7% after a rally in U.S. high-tech stocks and ahead of the company’s earnings on Thursday.

There were 176 advancers on the Nikkei index against 46 decliners.