(Bloomberg) — The yen fell after a ruling-party vote positioned pro-stimulus lawmaker Sanae Takaichi to become Japan’s next leader, boosting prospects for gains in Tokyo shares.
Nikkei stock futures on the Chicago Mercantile Exchange jumped more than 4% on expectations that Takaichi’s policies will boost demand-driven shares. The yen weakened 1.2%, moving toward the closely watched 150 level against the dollar and neared a record low against the euro.
In other corners of the market, gold advanced above $3,900 an ounce to yet another record, extending a powerful rally that’s been a feature of commodity markets all year. Bitcoin also set another all-time high over the weekend. Oil advanced after OPEC+ agreed Sunday to revive just 137,000 barrels a day of halted supply — a slower pace than earlier this year. Equity-index futures for the US also rose in early Asian trading.
Takaichi is set to become Japan’s first female prime minister after winning the Liberal Democratic Party leadership contest Saturday. Investors had expected the seat to go to political scion Shinjiro Koizumi, who was seen as taking a more fiscally cautious view and leaving the BOJ to press ahead with normalization.
Takaichi instead advocated for expansionary fiscal policy and in a recent Kyodo survey said the BOJ should leave interest rates unchanged for now. While her appointment has lifted growth expectations, it has also raised concern over increasing bond supply while reducing chances of a Bank of Japan rate hike this month.
“It might be more of a positive surprise for equities,” said Anna Wu, cross-asset investment strategist at VanEck Australia. “I won’t be too surprised if the long-end yields go up a bit on Monday, given her overarching fiscal policy,” she said, while noting that Takaichi is unlikely to overstimulate, and volatility may be limited.
Meanwhile the US government shutdown continued with unions representing hundreds of thousands of federal workers asking a judge to immediately block any mass firings by the Trump administration.
The shutdown meant the Bureau of Labor Statistics didn’t publish the non-farm payroll figures on Friday.
In corporate news, Nvidia Corp.’s major server production partner Hon Hai Precision Industry Co. reported 11% growth in quarterly sales, signaling healthy demand for AI infrastructure.
Traders in Asia will also be focused on French bond futures after President Emmanuel Macron’s broadly unchanged cabinet sparked an immediate backlash from opposition parties.
While most senior members from the cabinet of ousted premier Francois Bayrou were renamed to their posts, Roland Lescure was appointed finance minister and faces the task of passing a budget through a fractured parliament. The euro edged lower early Monday amid broad greenback strength.
The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.3% to $1.1710 The Japanese yen fell 1.2% to 149.31 per dollar The offshore yuan was little changed at 7.1387 per dollar Cryptocurrencies
Bitcoin rose 0.6% to $123,471.51 Ether rose 0.4% to $4,517.65 Commodities
West Texas Intermediate crude rose 0.9% to $61.44 a barrel Spot gold rose 0.6% to $3,909.72 an ounce This story was produced with the assistance of Bloomberg Automation.
