World shares rally and Japan's Nikkei 225 jumps after a big victory for PM Takaichi's ruling party

BANGKOK: World shares advance and Tokyo’s Nikkei 225 jumps as much as 5% to a record on Monday after Japanese Prime Minister Sanae Takaichi’s governing party secures a two-thirds supermajority in a parliamentary election.

In early European trading, Germany's DAX gains 0.6% to 24,864.59, while the CAC 40 in Paris edges 0.2% higher to 8,288.06. Britain’s FTSE 100 is up 0.3% at 10,399.61.

US futures edge higher after the US stock market roared back on Friday as technology stocks recovered much of their losses from earlier in the week and bitcoin halted its plunge. Futures for the S&P 500 added 0.1%, while those for the Dow Jones Industrial Average were up 0.2%.

On Friday, the S&P 500 rallied 2% for its best day since May. The Dow industrials soared 2.5%, topping the 50,000 level for the first time. The Nasdaq composite leaped 2.2%.

The combination of a rebound in tech shares, Wall Street’s rally and other upbeat news lifts shares early Monday.

In Tokyo, the Nikkei 225 closed 3.9% higher at 56,363.94. Earlier in the day the benchmark hit a new intraday record of 57,337.07.

The dollar weakens slightly against the Japanese yen, trading at 156.71 yen, down from 157.10 yen late Friday.

The landslide election victory gives Takaichi a much stronger mandate to pursue market-friendly policies.

NHK, citing results of vote counts, said Takaichi’s Liberal Democratic Party, or LDP, alone secured 316 seats by early Monday, comfortably surpassing a 261-seat absolute majority in the 465-member lower house, the more powerful chamber of Japan’s two-chamber parliament. That marks a record since the party’s foundation in 1955 and surpasses the previous record of 300 seats won in 1986 by the late Prime Minister Yasuhiro Nakasone.

“So overall, as the LDP has gone from a very weak government that really couldn’t do anything to an extremely strong government now with the supermajority of the lower house, they really could call the shots,” said Neil Newman, managing director and head of strategy at Astris Advisory Japan.

Takaichi’s first major task when the lower house reconvenes in mid-February is to work on a budget bill, delayed by the election, to fund economic measures to address rising costs and sluggish wages.

“Japan just delivered the kind of election result markets instinctively embrace because it removes the one thing traders price at a premium: political ambiguity,” Stephen Innes of SPI Asset Management said in a commentary.

“Politically, the win hands Prime Minister Takaichi freedom of movement and removes the need to bargain every decision down to the lowest common denominator,” he said.

Other markets across Asia also rally.

In Seoul, the Kospi gains 4.1% to 5,298.04, buoyed by strong buying of tech shares.

Hong Kong's Hang Seng index climbs 1.8% to 27,027.16 and the Shanghai Composite index rises 1.4% to 4,123.09. Taiwan's Taiex gains 2%.

In Australia, the S&P/ASX 200 surges 1.9% to 8,870.10.

Gains for computer chip companies help drive Wall Street's widespread rally on Friday. Nvidia jumps 7.8% and Broadcom climbs 7.1%.

The S&P 500 still falls to its third losing week in the last four. Apart from worries about spending by Big Tech companies, which are Wall Street’s most influential stocks, concerns about AI potentially stealing customers from software companies also hurt the market. Software stocks were hit particularly hard after AI firm Anthropic released free tools to automate things like legal services.

In other dealings early Monday, bitcoin gains 1% to trade just below $70,000. A weekslong plunge sent it to close to $60,000 late Thursday, more than halfway below its record price set in October.

Prices in the metals market have calmed a bit following their own wild swings. Gold rises 1.4% to $5,048.90 per ounce, while silver adds 6.2% to $81.64.

US benchmark crude oil sheds 60 cents to $62.95 per barrel. Brent crude, the international standard, gives up 60 cents to $67.45 per barrel.

The euro rises to $1.1866 from $1.1814.

By RSS/AP