Tokyo: Nikkei tops 50,000 mark for first time on stimulus euphoria
[TOKYO] Japan’s Nikkei share average climbed past the 50,000 level for the first time on Monday, continuing a run of successive records on expectations of sizeable spending from the nation’s new prime minister.
Crossing the key psychological threshold is the latest milestone for the blue-chip share gauge that has been red hot since fiscal dove Sanae Takaichi began her ascent to power.
The Nikkei 225 Index jumped 1.6 per cent to 50,080.49 in early trading.
The gauge broke through 45,000 on September 16 and has marched through successive round numbers at a rapid clip. It marks a dramatic turnaround for a long-moribund market that saw the Nikkei take 34 years to finally recover to its Bubble Economy peak in February 2024.
The index rose to the brink of 50,000 last Tuesday, when Takaichi cleared a parliamentary vote to become premier. The Nikkei finished the week 3.6 per cent higher as Takaichi pledged a proactive spending policy, with an economic stimulus package expected to exceed 13.9 trillion yen (S$120 billion).
“Fiscal packages tend to be welcomed by the market, irrespective of their actual impact on the overall economy,” said Norihiro Yamaguchi, lead Japan economist at Oxford Economics.
“The fact that Takaichi’s policy focus is on strategic investment and other market-friendly areas is another reason why the stock market reacted strongly.”
Japanese equities have been on the upswing since mid-July, when an electoral drubbing for the ruling Liberal Democratic Party sparked bets that fiscally hawkish Shigeru Ishiba would resign as prime minister.
Ishiba finally announced in September he would step aside, setting up a party leadership vote won by Takaichi, a devotee of the “Abenomics” stimulus policies of late premier Shinzo Abe. REUTERS
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