Japanese stocks jump after PM’s party retains majority

Japanese shares jumped on Monday, with the Nikkei hitting a one-month high, a day after Prime Minister Fumio Kishida’s ruling party held on to a majority in a parliamentary election and raised hopes of a stable government.

The Nikkei share average rose 2.4 per cent to 29,570.56, reaching its highest level since late September, while the broader Topix gained 1.70 per cent to 2,035.14.

Kishida’s conservative Liberal Democratic Party (LDP) retained a majority in the powerful lower house in Sunday’s parliamentary election and is expected to compile a stimulus to support pandemic-hit businesses.

“The market was lifted by a positive surprise of the LDP’s solo majority win at the election. Investors are now more confident in a stable, long-term administration of the party,” said Kentaro Hayashi, senior strategist at Daiwa Securities.

A poorer showing by the LDP would have heightened expectations that Kishida could follow predecessor Yoshihide Suga in becoming another short-term premier.