Nikkei Index Surpasses 53,000 for First Time Ever on Prospects of Early General Election in Japan

Expectations are growing that Japanese Prime Minister Sanae Takaichi will call an early general election, driving the Nikkei 225, Japan's benchmark stock index, to surpass 53,000 for the first time ever during trading on the 13th.

As of 10:42 a.m. on this day, the Nikkei index was trading at 53,616.26, up 3.23% from the previous session's closing price on the 9th.

A man is walking past the Tokyo Stock Exchange on the 13th. Photo by AFP

Shortly after the market opened, the index surged as high as 53,814 at one point.

Nihon Keizai Shimbun (Nikkei) reported, "Foreign investors are buying in due to reports that Prime Minister Takaichi is considering holding an early general election next month." The newspaper added that the strong performance of the U.S. stock market is also influencing Japanese stocks.

Previously, on the 9th, Yomiuri Shimbun reported that Prime Minister Takaichi is considering dissolving the House of Representatives early in the regular Diet session scheduled to convene on the 23rd, and holding a snap general election in February.

There is growing speculation that if the Liberal Democratic Party wins the early general election, Prime Minister Takaichi's active fiscal policy will be strengthened. As a result, the yen is weakening and long-term interest rates are rising.

On the Tokyo foreign exchange market that morning, the yen-dollar exchange rate exceeded 158 yen per U.S. dollar.