Japan’s Nikkei hits one-month high after coalition boosts majority

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TOKYO — Japan’s Nikkei index hit a one-month high on Monday after the country’s coalition government bolstered its majority in the upper house of parliament in an election on Sunday.

The Nikkei stock average gained 1.02% to 26,787.00 at the lunch break, after rising 2% to its highest level of 27,072.17 since June 13. The broader Topix rose 1.08% to 1,907.90.

Prime Minister Fumio Kishida’s Liberal Democratic Party (LDP) and his junior partner Komeito won 76 of 125 seats in the chamber, down from 69 earlier, according to an exit poll by public broadcaster NHK.

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The election came two days after the assassination of former Prime Minister Shinzo Abe, a mainstream politician and power broker.

« The market has been driven by expectations of long-term stability in Japan’s political base, » said Maki Sawada, strategist at Nomura Securities.

« But warnings ahead of corporate earnings reports could limit the Nikkei’s gains this week, and concerns about a rise in new COVID-19 cases could weigh on sentiment. »

Uniqlo heavyweight owner Fast Retailing gained 2.14% and tech investor SoftBank Group rose 1.97%

Automaker Toyota Motor and Sony Group boosted the Topix, up 1.52% and 1.97%, respectively.

Contrary to trend, chipmaking equipment maker Tokyo Electron weighed on the Nikkei, down 2.41%, after Nomura Securities downgraded the chipmaking equipment maker’s rating from « neutral ». » to buy « .

Its counterpart Advantest lost 0.41%.

Yaskawa Electric, a robot maker seen as a leading indicator of Japanese manufacturers’ earnings trend, fell 4.73% after its quarterly earnings missed the consensus.

(Reporting by Junko Fujita; Editing by Rashmi Aich)