FX.co ★ Japanese Shares Rally Ahead of Premier Vote

The Nikkei 225 surged by 2% to exceed 48,500, while the Topix Index rose by 1.2% to 3,210 on Monday, recovering from the losses of the previous session. This upward movement came as investors braced for Japan's leadership vote scheduled for Tuesday, which will determine the nation's next prime minister. Market sentiment received a boost after the ruling Liberal Democratic Party and the Japan Innovation Party reached an agreement to form a coalition government, setting the stage for Sanae Takaichi to potentially become Japan’s first female prime minister. The anticipation of a "Takaichi trade," characterized by expected fiscal stimulus and accommodative monetary policy, spurred equity purchases while prompting sales of domestic bonds and the yen. The rally was widespread, with substantial advances from significant companies like SoftBank Group (+2.8%), Tokyo Electron (+2.9%), Lasertec (+3.3%), Mitsubishi Heavy Industries (+1.2%), and Mitsubishi UFJ (+1.1%).