Low-angle view of Tokyo’s skyscrapers showing a variety of architectural styles
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Japan’s Nikkei stock average hit 58,000 yen for the first time in history on Thursday, extending its post-election rally to new highs on the back of renewed confidence in domestic politics and the ruling government’s economic policies.
The benchmark index then pared its gains to trade marginally higher at 57,663. The broader Topix rose 0.68%.
According to market participants, Japanese stocks have hit new highs in recent days, boosted by the so-called “high market trade” following Prime Minister Sanae Takaichi’s landslide victory in the House of Representatives.
Global investment firm GMO said Takaichi’s landslide victory in the snap election gives him an unusually strong, multi-year mandate to implement policies that it sees as broadly supportive of Japan’s markets and business sector.
Stock prices are rising and bond investors seem relieved, but GMO points out that the risk of intervention may increase as the yen approaches 160 against the dollar.
Other markets in Asia also pushed back on expectations for the Federal Reserve’s interest rate cuts and ignored better-than-expected U.S. jobs data, sending U.S. stocks lower overnight.
South Korea’s Kospi rose as much as 2.1% to hit a record high of 5,466.9 points, before netting the gains and trading 1.82% higher. The small-cap Kosdaq traded relatively flat.
Singapore’s benchmark index exceeded 5,000 for the first time.
Australia’s S&P/ASX 200 index rose 0.42% in early trade.
hong kong Hang Seng Index Mainland China’s CSI 300 rose 0.12%.
Overnight in the United States, the Dow Jones Industrial Average ended its three-day winning streak after the January employment report exceeded expectations.
The blue chip index fell 66.74 points (0.13%) to close at 50,121.40. The S&P 500 was almost flat at 6,941.47. The Nasdaq Composite fell 0.16% to end at 23,066.47.
According to the January Nonfarm Employment Report released by the U.S. Bureau of Labor Statistics, the number of employees increased by 130,000 in January. Economists compiled by Dow Jones had predicted the increase would be 55,000. Job growth for December was revised downward to 48,000.
A strong labor market has reduced the likelihood of a rate cut by the Federal Reserve.
The jobs report comes after Tuesday’s consumer data was weaker than expected. According to the report, consumer spending was flat in December, falling short of the 0.4% month-on-month increase expected by economists compiled by Dow Jones.
—CNBC’s Sean Conlon and Liz Napolitano contributed to this report.
