Japanese stocks surged to an all-time high and the yen tumbled to a 19-month low as markets bet that a possible snap election next month would reignite the “Takaichi trade”.
The Nikkei 225 stock index rose as much as 3.6 per cent on Tuesday while the yen weakened to ¥158.88 against the dollar, its lowest rate since July 2024 and close to levels at which Japan’s finance ministry has previously stepped in to support the currency. Brokers in Tokyo said domestic and foreign investors were driving the stock rally.
The market moves were underpinned by speculation that Prime Minister Sanae Takaichi would call an early election, betting on using her support among younger Japanese to try to restore her Liberal Democratic Party’s majority in parliament.