Japanese stocks hit another record high as expectations of snap poll rise

Japanese indexes hit record highs Wednesday on expectations that Prime Minister Sanae Takaichi could call for a snap election, likely in February.

Reports of a sudden election at a time when the Japanese leader enjoys huge popularity have fueled the so-called “Takaichi trade,” characterized by a weak yen — good for Japanese exports — and rising equity markets, amid expectations that she would advocate policies that stimulate the economy.

The Nikkei 225 index rose 1.48%, crossing the 54,000 mark for the first time and hitting a record high of 54,341.23. The Topix also scaled a new peak, gaining 1.26% to 3,644.16.

The Japanese yen has also weakened past the 159 mark against the dollar, reaching its lowest level since July 2024, when Japanese authorities intervened to stop the yen’s slide.

“Around the time of Lower House elections, overseas investors tend to buy Japanese stocks, and large-cap, high-ROE,andhigh-beta stocks tend to perform well,” Bank of America said in a Tuesday note.

Other Asia markets were mixed, with South Korea’s Kospi rising 0.65% to 4,723.1, while the small-cap Kosdaq ended 0.72% lower at 942.18.

Hong Kong’s Hang Seng index was 0.33% higher in its last hour of trade, led by consumer non-cyclical and tech stocks, while the mainland China’s CSI 300 reversed gains to close 0.4% lower at 4,741.93.

Australia’s S&P/ASX 200 gained 0.14% to end the day at 8,820.6.

On the commodities front, spot silver breached the $90 mark for the first time, rising 3.7%. The metal has been one of 2025’s greatest gainers.