Japan's Nikkei seen hitting new highs as yen, bonds sputter on Takaichi victory

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};ge("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat($n)),notifLabel:document.querySelector(".".concat(Xn))};t.notifDropdown&&so(e,t)}))}()}};]]>By Rocky SwiftSun, October 5, 2025 at 11:59 PM GMT+2 3 min readBy Rocky SwiftTOKYO (Reuters) -Japanese shares are expected to keep setting records even as the nation's currency and bonds sputter after fiscal dove Sanae Takaichi was elected on Saturday to lead the ruling party and likely become prime minister.Takaichi, 64, was considered to have the most expansionist fiscal and monetary agenda among five candidates in the Liberal Democratic Party race to replace hawkish Prime Minister Shigeru Ishiba.In the lead-up to the LDP race, a "Takaichi trade" emerged - long on stocks and bearish on Japanese government bonds, particularly longer maturities - positioning for a win by Takaichi, a devotee of the "Abenomics" stimulus policies of the late Shinzo Abe.'POSITIVE SURPRISE' FOR SHARES, BONDS ON EDGEJapan's benchmark Nikkei logged a record closing high of 45,769.50 on Friday, topping the record set the week before, as investors bet whoever succeeded Ishiba would be more dovish.Short positions on the gauge have been building up recently and may now be unwound, said Resona Holdings strategist Hiroki Takei."This could be considered a positive surprise for stock prices," Takei said. "If short-covering is triggered, the rally could gain momentum, potentially pushing the index toward the 47,000 level."The Japanese government bond market has been on edge since late May due to waning demand among traditional buyers, decreased support from the central bank and concerns about swelling debt.The sector was dealt another blow in July, when Ishiba's coalition lost its majority in the upper house of parliament - having lost its lower house majority last year - as outsider parties campaigning on tax cuts and increased spending gained seats.The 30-year JGB yield surged to a record 3.285% on September 8, the first trading day after Ishiba announced he was stepping down.In recent weeks, the Nikkei's momentum slowed and longer-term JGBs rallied as markets gave the edge in the LDP race to farm minister Shinjiro Koizumi and Takaichi appeared to moderate her stance, leaving sales tax cuts out of her platform and staying mostly mum on the Bank of Japan."She seemed to have toned down her rhetoric recently but ultimately the feeling is still that she will push for looser fiscal and monetary policy," said James Athey, a fixed income manager at British investment group Marlborough. "As such, there is likely to be a negative reaction in long-end JGBs and the yen."Japan's currency closed at 147.44 per dollar on Friday, staging a 1.4% gain on the week that was the sharpest since mid-May.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,782.00 -6.75 (-0.10%)Dow Futures46,866.00 -92.00 (-0.20%)Nasdaq Futures25,167.25 -17.50 (-0.07%)Russell 2000 Futures2,496.40 -4.60 (-0.18%)VIX16.63 +0.26 (+1.59%)Gold3,974.70 -1.60 (-0.04%)PortfolioSign in to access your portfolioSign inTop gainersORBS Eightco Holdings Inc. 11.07 +2.83 (+34.34%)AMD Advanced Micro Devices, Inc. 203.71 +39.04 (+23.71%)SANM Sanmina Corporation 140.00 +25.92 (+22.72%)MFH Mercurity Fintech Holding Inc. 35.79 +6.38 (+21.69%)AAOI Applied Optoelectronics, Inc. 33.79 +5.86 (+20.98%)Top losersAPP AppLovin Corporation 587.00 -95.76 (-14.03%)CVCO Cavco Industries, Inc. 498.60 -71.83 (-12.59%)QUBT Quantum Computing Inc. 22.16 -2.46 (-9.99%)SKY Champion Homes, Inc. 69.50 -6.85 (-8.97%)PSIX Power Solutions International, Inc. 84.58 -7.70 (-8.34%)Most activePLUG Plug Power Inc. 4.1300 +0.3299 (+8.68%)OPEN Opendoor Technologies Inc. 9.28 +1.17 (+14.43%)AMD Advanced Micro Devices, Inc. 203.71 +39.04 (+23.71%)NVDA NVIDIA Corporation 185.54 -2.08 (-1.11%)ACHR Archer Aviation Inc. 13.64 +2.07 (+17.89%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersAMD Advanced Micro Devices, Inc. 203.71 +39.04 (+23.71%)APP AppLovin Corporation 587.00 -95.76 (-14.03%)TMQ Trilogy Metals Inc. 2.0900 +0.0100 (+0.48%)FIG Figma, Inc. 56.96 +3.92 (+7.39%)VZ Verizon Communications Inc. 41.44 -2.23 (-5.11%)Top economic events