Nikkei Hits Record High Amid Optimism Over Economic Policy
The benchmark Nikkei 225 Index reached an unprecedented level, reflecting investor confidence in the new administration’s plans.
- The Nikkei 225 Index rose as high as 58,015.08 on Thursday.
- The index has increased by 15% so far in 2026.
- Prime Minister Sanae Takaichi’s Liberal Democratic Party secured a significant victory in Sunday’s national election.
- The “Takaichi trade” has driven local shares to successive record highs.
The benchmark Nikkei 225 Index was up 0.4% at 57,874.61 after rising as high as 58,015.08 earlier in the day, as trading resumed after a holiday. So far in 2026, the Nikkei has surged 15%. The broader Topix climbed 0.8% to 3,884.16 on Thursday.
Market Boosted by Election Results and Earnings
The earnings season is underway in the world’s fourth-largest economy, and domestic markets have been buoyed by expectations that a decisive showing by Takaichi’s Liberal Democratic Party in Sunday’s national election will enable her to push through spending and tax-relief measures. Since she began her rise to become the nation’s first female premier in October, the “Takaichi trade” has pushed local shares to successive record highs while spurring declines in government bonds and the yen.
What factors are driving the Japanese stock market’s recent gains? Investor optimism surrounding Prime Minister Takaichi’s economic policies, coupled with strong corporate earnings, are the primary drivers of the current rally.
“Following recent strong earnings results and the LDP’s landslide victory under the Takaichi administration, the market has been on a significant upward trend,” said Wataru Akiyama, a strategist at Nomura Securities. “The sense of overheating seems to be intensifying, so profit-taking movements could emerge from here on.”
Mixed Performance Among Individual Stocks
Honda Motor shares slumped 3% after the automaker posted a 61% drop in third-quarter profit after market hours on Tuesday. Results from SoftBank Group after the bell on Thursday will be closely watched for details on how it will fund its massive investments in AI.
There were 148 advancers on the Nikkei against 74 decliners. The largest gainers in the index were cosmetics maker Shiseido, up 14%, followed by Mitsui Kinzoku, a key supplier in the AI sector, which climbed 11%. The largest losers were Sharp, which sank 11%, followed by consulting services provider Baycurrent, down 8.6%.
