Nikkei Index Soars 2.6% to Close... LDP's Landslide Victory in General Election Impact

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Suhwan] In the Japanese general election, the ruling Liberal Democratic Party (LDP) secured a stable majority, leading the Nikkei index to surge by over 2.6% compared to the previous trading day and close strongly.

On the 1st, at the Tokyo Stock Exchange, the Nikkei 225 index closed at 29,647.08, up 2.61% (754.39 points) from the previous trading day. The TOPIX index ended the session at 2,044.72, rising 2.18% (43.54 points).

The Nikkei index closed higher for the first time in four trading days.

This is analyzed to be the result of the LDP's victory in the general election the day before.

Contrary to initial expectations that the LDP might perform poorly and fail to reach a majority (233 seats), it secured an absolute stable majority with 261 seats. As a result, the LDP monopolized all standing committee chairmanships and secured enough seats to hold a majority of committee members.

Accordingly, the market saw political uncertainty resolved and anticipated that a large-scale economic stimulus package would be implemented under LDP leadership, which is credited with lifting the stock market that day.

In fact, at 2 p.m. that day, Prime Minister Fumio Kishida of the LDP held a press conference and announced plans to implement a large-scale economic stimulus package by mid-month.

The Nihon Keizai Shimbun explained the sharp rise in the stock market, stating, "With expectations for political stability in the market and forecasts that the government will execute a more proactive budget, funds flowed into a wide range of stocks."

This content was produced with the assistance of AI translation services.