Nikkei 225 Hits New Peak as Post-Election Momentum Lifts Most Asian Equities

The Nikkei 225 closed at an all-time high on Tuesday, extending a rally that has gathered pace since Prime Minister Sanae Takaichi’s decisive Lower House victory earlier this month. Broad gains across most major Asian bourses accompanied the surge in Tokyo, while Wall Street’s overnight performance offered an additional tailwind for regional sentiment.

Japan’s benchmark index advanced 2.28% to finish at 57,650.54, surpassing the previous record set only days earlier. The broader Topix added 1.9% to settle at 3,855.28, also a new closing high. Market participants continued to describe the upward move as part of the “Takaichi trade,” a phrase that has come to encapsulate expectations for political stability, potential fiscal stimulus and corporate governance reforms under the recently re-elected administration.

Trading in individual names was led by SoftBank Group Corp., whose shares climbed 10.68% by the end of the session. The conglomerate had risen as much as 11.95% intraday after a subsidiary raised its full-year profit forecast for the fiscal year ending March 31. Tuesday’s advance built on a 6.3% gain the previous day, bringing the two-day rise to more than 18%.

Regional performance mixed but largely positive

Elsewhere in North Asia, South Korea’s Kospi managed a fractional gain, closing up 0.03% at 5,301.69. The small-capitalization Kosdaq, however, slipped 1.1% to 1,115.20, weighed down by profit-taking in biotech and semiconductor equipment shares. In Greater China, Hong Kong’s Hang Seng Index added 0.58% to 27,183.15, while the mainland CSI 300 improved 0.11% to 4,724.30.

Australian equities were little changed. The S&P/ASX 200 finished virtually flat at 8,867.40 as modest gains in the financial sector offset declines among major miners. Traders cited caution ahead of domestic inflation data due later in the week.

Combined, the day’s moves sustained an upward trajectory that many analysts attribute to improving corporate earnings guidance, a steady global interest-rate environment, and optimism that Beijing’s incremental policy support will help stabilize Chinese growth. Historical index series for the region are maintained by the Tokyo Stock Exchange, which recorded Tuesday’s levels as the highest in its database.

Wall Street backdrop supportive

Overnight gains in U.S. technology shares provided a constructive lead for Asian markets. The S&P 500 advanced 0.47% on Monday, notching consecutive rises, while the Nasdaq Composite jumped 0.9%. The Dow Jones Industrial Average edged up to 50,135.87, setting a fresh record high. Investors in New York continued to rotate into large-cap tech names viewed as beneficiaries of artificial-intelligence demand and resilient consumer spending.

Futures linked to the three major U.S. indices were little changed in Asian hours, suggesting a steady open later on Tuesday. The lack of a pullback in global equities has reinforced risk appetite across the Pacific, market strategists said.

Drivers behind Japan’s outperformance

Several factors have converged to push Japanese equities higher since the country’s snap election. The decisive mandate secured by Prime Minister Takaichi is expected to smooth passage of supplementary budget measures aimed at bolstering household purchasing power and incentivizing capital expenditure. Simultaneously, the Bank of Japan’s cautious approach to reducing monetary accommodation is viewed as supportive of asset prices, even as officials monitor wage developments and core inflation.

Imagem: Finances

Corporate governance initiatives, including requirements for companies trading below book value to present improvement plans, have also drawn renewed interest from foreign investors. According to exchange data, overseas funds have been net buyers of Japanese stocks for five consecutive weeks.

In currency markets, the yen traded in a narrow range around ¥133.4 per U.S. dollar, exerting minimal influence on exporter shares. Bond yields were likewise steady, with the 10-year Japanese government bond holding near 0.85%.

Sector highlights in Asia

Technology and communication services led sector gains in Tokyo, mirroring the U.S. trend. Automakers also advanced after several firms reported stronger-than-expected January sales. In Seoul, index heavyweight Samsung Electronics was flat, while SK Hynix slipped 0.4%, capping the Kospi’s progress.

Hong Kong’s session saw strength in financials and property developers amid speculation about additional liquidity support from mainland regulators. In contrast, health-care stocks on the Kosdaq experienced broad selling after recent outperformance.

Outlook

Market attention now turns to upcoming economic releases, including Japan’s preliminary fourth-quarter GDP figures and China’s official manufacturing PMI, both due later this week. Analysts will also scrutinize corporate earnings from major Asian technology firms for further clues about demand trends.

For now, the combination of political clarity in Japan, measured global growth and steady monetary policy appears to be bolstering risk sentiment across the region. Whether the Nikkei 225 can sustain its record-setting trajectory may hinge on the pace of legislative action in Tokyo and the durability of earnings momentum in the months ahead.

Crédito da imagem: Bloomberg via Getty Images