"High market trading" dominates the market, the Nikkei 225 stands at 57,000 points for the first time, Japanese bond yields rise across the board, and gold returns to above the $5,000 mark

# Source: Wall Street News

By Zhao Ying

The Liberal Democratic Party (LDP) led by Sanae Takaichi has won a supermajority of two-thirds of the seats in the House of Representatives on its own, the highest share held by any single party in Japan's post-war electoral history. The Nikkei 225 Index extended its gain to 5.15%, breaking above the 57,000 mark for the first time ever. Japan's TOPIX Index rose 3% further. Spot gold climbed to around $5,040, up 1.6% intraday; spot silver topped the $80 mark, surging more than 3% on the day.

On Monday, the LDP led by Japanese Prime Minister Sanae Takaichi claimed an electoral victory, sending the yen slightly weaker and the Nikkei Index to a record high. Other Asian stock markets opened higher tracking Wall Street's gains, with South Korea's stock market jumping over 4%. Precious metals rebounded again, with silver breaking above $80.

Data from Japan's public broadcaster NHK showed that the ruling LDP secured a supermajority of two-thirds of the seats in the House of Representatives independently. This represents the highest seat ratio for any political party in Japan's post-war elections.

The Nikkei 225 Index extended its gain to 5.15%, crossing the 57,000 level for the first time in history. Japan's TOPIX Index rose a further 3%. SoftBank Group's share price surged 8.5%, the biggest gain since January 28.

The USD/JPY exchange rate traded around 157.50. Japan's 30-year government bond yield rose 6.5 basis points to 3.615%, while the 10-year government bond yield climbed 4.5 basis points to 2.275%.

The LDP's absolute majority in the House of Representatives has cleared the way for Sanae Takaichi to roll out more debt-fueled fiscal stimulus. Market expectations for the continuation of loose policies have weighed on the yen, yet the sharp decline has also raised the risk of verbal intervention by Japanese authorities.

South Korea's KOSPI opened 4.1% higher, with Samsung Electronics' share price rising more than 6%.

In the commodities market, spot gold advanced to around $5,040, up 1.6% intraday; spot silver broke above the $80 threshold, surging over 3% on the day. Brent crude oil fell 1.3% as tensions in the Middle East eased.

Regarding the trend of gold, some analysts argued that the sharp rally in gold is no mystery. Japan cannot raise interest rates without inflicting severe damage on its own balance sheet, leaving it with no choice but to print money or hope for a favorable turn of events. As Japan's fiat currency continues to weaken, the appeal of hard assets is rising steadily.

Iron ore is set to be in the spotlight. Over the weekend, major Australian ports closed and bulk carriers were forced to head out to sea as a tropical cyclone approached Australia's west coast. The waters near Australia's Pilbara region also house a number of oil and gas operation facilities.

Updates to follow.

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