"Japanese equities soared to fresh record highs after Sanae Takichi's weekend election victory - markets bet that it will mean more spending and fiscal stimulus. The yen weakened while the Nikkei 225 jumped 5% to a new all-time high. USDJPY hit 150 but we might see some of these moves fade shortly because they're going to need a stronger currency to get inflation down. But for now the trade is more stimulus, looser monetary policy, weak yen = risk on for stocks."
"Fresh doubts surfaced about the viability of the new government after Macron loyalist Roland Lescure was named finance minister in a cabinet full of people from the last, ousted, government. It lasted just hours before Lecornu resigned this morning...is France ungovernable? Free and fair elections are required to get a government with an actual mandate to govern, which Macron does not possess."
Japanese equities surged to fresh record highs after Sanae Takichi's weekend election victory as investors priced in higher spending and fiscal stimulus. The yen weakened while the Nikkei 225 jumped 5% to an all-time high and USDJPY reached 150; some of these moves may later fade because a stronger currency will be needed to bring inflation down. The immediate market reaction favored more stimulus, looser monetary policy and a weak yen, removing bets of a near-term rate hike. The new prime minister, the country's first female leader, is seen as aligned with the US and likely to boost defence, cybersecurity and nuclear energy. European bourses were mixed amid French cabinet turmoil and resignations, Wall Street eked out records across several indexes, and OPEC+ announced a modest crude output increase from November.
#japan-equity-rally #yen-weakness #japanese-fiscal-stimulus #french-political-instability #opec-output-decision
Read at London Business News | Londonlovesbusiness.com
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