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Japanese Nikkei 225 Index Reaches Record Highs Following Election

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Japanese Nikkei 225 Hits Record Highs Amidst Post-Election Rally

The Japanese Nikkei 225 stock index has reached record highs recently, extending a post-election rally following Prime Minister Sanae Takaichi's victory in the Lower House election. This significant market movement occurred amidst broader gains across other Asian markets.

Market Performance in Japan

The Nikkei 225 index saw considerable gains, closing on Tuesday at 57,650.54, an increase of 2.28%. By Thursday, the index reached 58,000 for the first time in its history. While it later pared some gains, it traded marginally higher at 57,663.

The broader Topix index also advanced. On Tuesday, it gained 1.9%, finishing at 3,855.28. It later advanced 0.68%.

Market observers have attributed the recent upward trend in Japanese stocks to a "Takaichi trade" following Prime Minister Takaichi's election victory.

Company Specifics

Shares of Softbank Group Corp. rose by 11.95% on Tuesday. This surge was linked to an upgraded full-year forecast from a subsidiary company for the financial year ending March 31. Softbank shares closed with a 10.68% gain, following a 6.3% gain the preceding Monday.

Expert Analysis and Outlook

Global investment firm GMO stated that Prime Minister Takaichi's election victory provides her with a multi-year mandate to execute policy, which they view as broadly supportive for Japan's markets and corporate sector.

However, GMO also noted that intervention risks could increase if the Japanese yen approaches 160 against the U.S. dollar.

Broader Asian Market Context

Other Asian markets also reported positive performance during this period. South Korea's Kospi index jumped by as much as 2.1% to a record high of 5,466.9 points, before paring gains to trade 1.82% higher. The small-cap Kosdaq traded relatively flat. Singapore's benchmark index also crossed 5,000 for the first time.

These gains in Asian markets occurred even as stronger-than-expected U.S. payroll data dampened expectations for Federal Reserve rate cuts and led to lower U.S. stock performance overnight.