TOPSHOT – Officials look on as people vote during the general election at a polling station set up at a local school in Tokyo on October 27, 2024. Japan voted on October 27 in its tightest election in years, with new Prime Minister Shigeru Ishiba and his juggernaut Liberal Democratic Party facing potentially their worst result since 2009. (Photo by Richard A. Brooks / AFP) (Photo by RICHARD A. BROOKS/AFP via Getty Images)
Richard A. Brooks | Afp | Getty Images
Japan’s benchmark Nikkei 225 and its Topix index climbed on Monday, supported by a weak yen amid political uncertainty as the ruling LDP lost its parliamentary majority.
The Nikkei rose 1.54%, leading gains in Asia while the Topix was up 1.23%.The yen weakened 0.84% to 153.59 on Monday.
The LDP and its coalition partner Komeito have secured 215 out of 465 seats, public broadcaster NHK reported early Monday morning local time. The opposition Constitutional Democratic Party and the Democratic Party for the People have made significant gains in this election.
This political uncertainty could deter the Bank of Japan from hiking rates, some analysts said.
Izumi Devalier, chief Japan economist at Bank of America, said that while political uncertainty and instability could delay rate hikes, the BOJ cannot ignore sustained weakness in the yen.
“I don’t think that necessarily means that the BOJ will be on hold for the foreseeable future. Obviously, you’ve got to watch the market developments, but we could still be on track for hikes in January or even December, depending on where the yen goes,” she said.
South Korea’s Kospi gained 0.61%, while the small cap Kosdaq was 1.02% higher.
Australia’s S&P/ASX 200 rose 0.17%.
Hong Kong’s Hang Seng index fell 0.24%, while mainland China’s CSI 300 saw a larger loss of 0.73%, after China reported its worst industrial profit numbers since the pandemic. Industrial profits in China plunged 27.1% year on year in September.
