Japan stocks rise and yen drops as Abe cruises to victory

Japanese Prime Minister Party Shinzo Abe waves to the crowd after a rally in Tokyo © AP

Monday 05:25 BST

What you need to know

• Japanese equities rally and yen weakens after Abe election victory
• Hong Kong equities down as financials drag on Hang Seng
• Gold touches two-week low, weighing down gold miners in Sydney

Overview

The Japanese yen weakened as Tokyo-listed equities climbed in the wake of the weekend’s snap election, while Hong Kong’s financial segment took a negative turn and gold touched a two-week low.

Hot topic

Japanese stocks led the region higher with Tokyo’s Topix index up as much as 1 per cent following a weekend victory at the polls for Shinzo Abe. The price-focused Nikkei 225 index was up as much as 1.2 per cent, on course for a 15th day of gains, matching an almost 30-year record for such a winning streak.

The prime minister’s ruling Liberal Democratic party-led coalition secured a two-thirds parliamentary “super majority” that gave Mr Abe a fresh mandate for “Abenomics”, and the chance to pursue his agenda of revising Japan’s postwar constitution.

In Sydney the S&P/ASX 200 was off 0.1 per cent, with falls in the industrials, real estate and consumer staples segments offsetting gains elsewhere. Gold miners were hit by a drop in the precious metal’s value, with the ASX All Ordinaries gold index falling 0.7 per cent.

Hong Kong’s Hang Seng Index was down 0.7 per cent after a positive start, with financials dropping 0.8 per cent. Much of that fall came courtesy of Asia-focused insurer AIA Group, which fell as much as 2.5 per cent on Monday after closing Friday down 1.5 per cent despite results showing a 20 per cent increase in the value of new business in the third quarter.

Forex and fixed income

The dollar was edging higher in Asia Pacific trading amid a mixed performance by currencies in the region, with the yen the worst off. The dollar index, which tracks the greenback against a basket of peers, was up 0.1 per cent at 93.768.

With equities in Tokyo climbing, Japan’s currency fell as much as 0.5 per cent against the dollar, touching a three-month low of ¥114.10, following the weekend’s election.

The Australian dollar was up 0.1 per cent on its US counterpart at $0.7822. Australian government bonds were the worst off among the region’s major sovereign notes with the yield, which moves inversely to price, on the 10-year note climbing 2 basis points to 2.794 per cent.

The 10-year US Treasury yield was little moved at 2.383 per cent, as was that on the equivalent Japanese government bond, at 0.068 per cent.

Commodities

Oil prices were edging upward as tensions in the Middle East continued to percolate, with Brent crude, the international benchmark, gaining 0.3 per cent to $57.90 a barrel. US marker West Texas Intermediate was up 0.5 per cent at $52.11.

Gold was faring poorly, off 0.4 per cent at $1,276.07 after pulling back from a two-week low.

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