'Abenomics': Japan stocks surge 4.8% on Takaichi's election

Nikkei index intraday breaks through 48,000 for the first time ever

Yen in the 150 range for the first time in two months

On the 6th, the Japanese stock market surged and the yen weakened. The move reflects the impact of Sanae Takaichi, who has supported former Prime Minister Shinzo Abe's economic policy 'Abenomics,' winning the ruling Liberal Democratic Party's presidential election last weekend and becoming likely to take office as the next prime minister.

That day, Japan's leading stock index, the Nikkei 225 average (Nikkei index), closed at 47,944, up 4.75% from the previous trading day. It is an all-time high based on the closing price.

According to the Nihon Keizai Shimbun (Nikkei), the day's gain was the fourth largest on record. During the session, the index rose as high as 48,150, also marking the first time it surpassed the 48,000 level intraday.

It is interpreted as investors expecting that Takaichi, who has supported 'Abenomics,' will pursue expansionary fiscal policy and accommodative monetary policy.

During the LDP presidential campaign, Takaichi indicated she would allow the issuance of deficit bonds, and immediately after winning said, "Whether fiscal policy or monetary policy, the government is responsible."

By sector, defense industry, nuclear fusion, and space-related stocks rose particularly sharply.

Some in the market warned of short-term overheating. An analyst at local brokerage SMBC Nikko Securities told the Nikkei, "A clear overshooting (short-term surge)," adding, "In the short term, one should guard against a pullback."

Conversely, the yen plunged amid growing expectations that the Bank of Japan will delay raising interest rates. The yen-dollar rate was around 150.1 yen to the dollar at about 3:36 p.m., up 1.86% from the previous trading day.

It is the first time in about two months since last August that the yen-dollar rate has hit the 150 range.

Min-kyung Shin, Hankyung.com reporter radio@hankyung.com