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A lively buzz swept through the Japanese financial markets this Wednesday, as indexes soared to unprecedented heights. The catalyst? Speculation is rife that Prime Minister Sanae Takaichi might be gearing up for an unexpected snap election potentially slated for February.
Against the picturesque backdrop of Osanbashi in Yokohama on December 10, 2022, captured beautifully by Yuichi Yamazaki for AFP, the stirring momentum of the “Takaichi trade” has captivated investors. This phenomenon, driven by the weakening yen—an advantageous scenario for Japanese exports—has sparked optimism regarding Takaichi’s potential economic stimulus policies. Her popularity is a key factor in this surge, and the anticipation of her advocating for economic growth fuels this positive market sentiment.
The Nikkei 225 index took a triumphant leap, ascending 1.48% to breach the 54,000 threshold for the very first time, peaking at an all-time high of 54,341.23. The Topix index mirrored this upward trend, jumping 1.26% to reach a new pinnacle at 3,644.16.
Concurrently, the Japanese yen has depreciated beyond the 159 mark against the dollar, marking its weakest point since July 2024. This decline evokes memories of past interventions by Japanese authorities to stabilize the currency’s descent. The current situation, however, underscores the intricate dance between currency valuation and market performance, as investors keenly watch for further developments in the political arena.
The Nikkei 225 index rose 1.48%, crossing the 54,000 mark for the first time and hitting a record high of 54,341.23. The Topix also scaled a new peak, gaining 1.26% to 3,644.16.
The Japanese yen has also weakened past the 159 mark against the dollar, reaching its lowest level since July 2024, when Japanese authorities intervened to stop the yen’s slide.
“Around the time of Lower House elections, overseas investors tend to buy Japanese stocks, and large-cap, high-ROE, and high-beta stocks tend to perform well,” Bank of America said in a Tuesday note.
Other Asia markets were mixed, with South Korea’s Kospi rising 0.65% to 4,723.1, while the small-cap Kosdaq ended 0.72% lower at 942.18.
Hong Kong’s Hang Seng index was 0.33% higher in its last hour of trade, led by consumer non-cyclical and tech stocks, while the mainland China’s CSI 300 reversed gains to close 0.4% lower at 4,741.93.
Australia’s S&P/ASX 200 gained 0.14% to end the day at 8,820.6.
On the commodities front, spot silver breached the $90 mark for the first time, rising 3.7%. The metal has been one of 2025’s greatest gainers.
