By Rocky Swift
TOKYO (Reuters) -Japan’s Nikkei share average climbed past the 50,000 level for the first time on Monday, continuing a run of successive records on expectations of sizeable spending from the nation’s new prime minister.
Crossing the key psychological threshold is the latest milestone for the blue-chip share gauge that has been red hot since fiscal dove Sanae Takaichi began her ascent to power.
The Nikkei 225 Index climbed as much as 2.4% to an intraday high of 50,491.23. The index ended the morning session up 2.1% at 50,337.36, bringing its year-to-date gains to 26%.
The broader Topix also touched an all-time high, rising nearly 1.6% to 3,321.48 by the midday close. It has gained 19.3% so far this year.
“The Nikkei’s gains were supported by expectations for the Takaichi administration, whose policy is focused on growth,” said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.
“The market kept buying stocks. Even as the Nikkei fell after Takaichi was elected, the decline did not last long because investors who were not able to catch up with the latest rally scooped up stocks on dip,” said Ueno.
Chip-testing equipment maker Advantest jumped 5.15% to give the biggest boost to the Nikkei on Monday, while Uniqlo-brand owner Fast Retailing rose 2.73%.
The gauge broke through 45,000 on September 16 and has marched through successive round numbers at a rapid clip. It marks a dramatic turnaround for a long-moribund market that saw the Nikkei take 34 years to finally recover to its Bubble Economy peak in February 2024.
The index rose to the brink of 50,000 last Tuesday, when Takaichi cleared a parliamentary vote to become premier. The Nikkei finished the week 3.6% higher as Takaichi pledged a proactive spending policy, with an economic stimulus package expected to exceed 13.9 trillion yen ($92.2 billion).
“Fiscal packages tend to be welcomed by the market, irrespective of their actual impact on the overall economy,” said Norihiro Yamaguchi, lead Japan economist at Oxford Economics.
“The fact that Takaichi’s policy focus is on strategic investment and other market-friendly areas is another reason why the stock market reacted strongly.”
Japanese equities have been on the upswing since mid-July, when an electoral drubbing for the ruling Liberal Democratic Party sparked bets that fiscally hawkish Shigeru Ishiba would resign as prime minister.
Ishiba finally announced in September he would step aside, setting up a party leadership vote won by Takaichi, a devotee of the “Abenomics” stimulus policies of late premier Shinzo Abe.
Takaichi will meet U.S. President Donald Trump later on Monday and hold a summit with him on Tuesday, having had her first call with the president over the weekend.
($1 = 150.7800 yen)
(Reporting by Rocky Swift in Tokyo, additional reporting by Junko Fujita; Editing by Jacqueline Wong, Lincoln Feast and Sherry Jacob-Phillips)
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