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Japan’s Nikkei Up More Than 2% After LDP Election Win

Prime Minister Fumio Kishida’s Liberal Democratic Party lost seats in the election, but the LDP still retains a parliamentary majority. The result was cheered by investors.


Japanese Prime Minister Fumio Kishida enjoyed a surprisingly easy poll win on Sunday. The Liberal Democratic Party lost seats but retained a majority. Photo from Sept 29, 2021 by Du Xiaoyi, pool via Reuters.

 

Investors in Japan welcomed the re-election of Prime Minister Fumio Kishida’s Liberal Democratic Party on Monday, with the Nikkei 225 index opening more than 2% higher – to a one-month high.

The benchmark Nikkei index was up 2.14% or 617.39 points at 29,510.08 in early trade, while the broader Topix index was up 1.50% or 30.11 points at 2,031.29.

Japan’s ruling coalition lost some parliamentary seats in Sunday’s general election but still managed to secure a majority, results reported by Japanese media showed.

Kishida’s Liberal Democratic Party (LDP) held on to 261 seats, which gave it a single-party majority.

“In addition to rallies in US stocks, the LDP securing a single majority is helping Japanese shares rise,” Toshiyuki Kanayama, senior market analyst at Monex, said.

The dollar fetched 114.13 yen in early Asian trade, against 114.03 yen late Friday in New York.

Among major shares in Tokyo, Olympus rallied 3.80% to 2,554 yen, shipping firm Nippon Yusen gained 3.67% to 8,480 yen, and Toyota was up 1.32% at 2,033 yen.

Sony jumped 5.44% to 13,855 yen while airline ANA Holdings was down 1.11% at 2,623.5 yen after it forecast an annual net loss and said it would eliminate 9,000 jobs, with pandemic-hit travel demand slow to recover.

 

Nomura down 8%

Shares in Nomura Holdings fell almost 8% on Monday, its biggest daily decline since March, after the Japanese brokerage reported worse-than-expected earnings due to a loss from transactions completed more than a decade ago.

Nomura said last week its second-quarter net profit was almost wiped out by a charge of about 39 billion yen ($342 million) that it said was related to legacy transactions in the United States from before the global financial crisis in 2007 and 2008.

The loss followed a $2.9 billion hit from the collapse of US investment fund Archegos – news of which emerged in March. Nomura stock slumped more than 16% on March 29 after the firm flagged a potential loss at a US subsidiary.

Hideyasu Ban, an equity analyst at Jefferies, said Nomura’s latest quarterly earnings was below his expectations. “We estimated that its earnings would start normalizing this quarter and its core businesses did, but 39 billion yen of reserve provisioning against the transactions before the global financial crisis was unexpected.”

Bucking the broader positive trend, Nomura traded 6.58% lower at 513.9 yen by 0451 GMT, after falling as much as 7.8% earlier in the session.

Nomura has been underperforming the benchmark Nikkei since the beginning of the year, losing 5.96% against the Nikkei’s jump of 7.74% so far.

 

• AFP and Reuters with additional editing by Jim Pollard

 

 

ALSO SEE:

Japan’s New PM Fumio Kishida Names Cabinet, Faces Poll Oct 31

Key Economic Policy Stances of Japan’s Next PM Candidates

Japan warns of possible defence crisis, greater tech rivalry

 

 

 

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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