Japan stock market 'bull run'…Takaichi's election impacts 'fiscal expansion'

The Nikkei 225 average (Nikkei index), Japan's benchmark stock index, hit an intraday record for the second consecutive day.

The Nikkei index started higher on the morning of the 7th and at one point recorded 48,527. The previous day's close was 47,944.

The Nikkei is rising because ruling LDP president Sanae Takaichi, who is expected to take the prime ministership in mid-month, has pledged fiscal expansion.

Takaichi, who won the LDP presidential election on the 4th, is expected to inherit former Prime Minister Shinzo Abe's economic policy 'Abenomics', which centers on large-scale quantitative easing, increased fiscal spending, and structural reforms.

As a result, views have spread that the Bank of Japan will find it difficult to raise its policy rate early, causing the yen to weaken and giving the stock market a tailwind.

The Nihon Keizai Shimbun (Nikkei) reported that when Shigeru Ishiba was elected LDP president in September last year the Nikkei index fell 4.8% on the first trading day, but on the first trading day after Takaichi's election, the previous day, it jumped 4.8%.

The yen/dollar exchange rate rose into the 150-yen range the previous day for the first time in about two months, and at around 9:35 a.m. that day it was at about 150.5 yen.

Songryeol Lee, Hankyung.com reporter yisr0203@hankyung.com