Tokyo Stock Exchange is Making History: Stock Prices at Record Levels!

A New Era Begins at Tokyo Stock Exchange

The Tokyo Stock Exchange started the new week strongly, reaching a historic peak of 47,976.87 points for the first time in its history. The election of Sanae Takaichi as the new leader of the ruling Liberal Democratic Party (LDP) has brought promising developments for investors. However, this situation has led to a depreciation of Japan's currency, the yen.

Record Drop in Yen: 150 Psychological Level Surpassed

Following Takaichi's victory, the yen depreciated by more than 1.7% against the US dollar, surpassing the psychological level of 150. The dollar/yen exchange rate (USD/JPY) rose by 1.79% to reach 150.08, showing a remarkable increase. Experts indicate that the likelihood of the Bank of Japan (BoJ) avoiding interest rate hikes has increased and suggest that the decline in the yen may not persist for long.

Market Expectations and Strategies

According to the head of Asia macro strategy at BNY Investment Institute, uncertainty regarding fiscal targets and political pressure on monetary policy could create additional pressure on the yen. However, during a period of weak US dollar performance, a sudden drop in the currency pair is not expected. It is noted that it may lag behind other major currencies.

Market Expectations Under Takaichi's Administration

A senior strategist at Jefferies stated that under the leadership of Japan's first female prime minister, the stock market outlook is likely to be more vibrant and energetic. Furthermore, market players are assessing that there will be an emphasis on fiscal expansion and monetary stimulus policies under Takaichi's leadership.

Nikkei Index Expected to Rise Until Year-End

The chief strategist at Asset Management One indicated that there is an expectation for the Nikkei 225 index to surpass 48,000 by the end of the year, a target that has gained momentum following Takaichi's election. However, it was emphasized that due to the LDP being in a minority position, it remains uncertain whether these targets can be achieved.