BoK governor contender Lee says too early for tightening, backs higher property taxesChina’s RWA tokenisation rules lift related stocks as compliance race beginsJimmy Lai 20 year prison sentence raises new tensions between China and the WestJapan escalates yen warnings as Kihara joins Katayama and Mimura. Supportive for JPY.Yen has surged after verbal intervention warnings. Early moves fake out.Australian household spending dips in December after sales surgePBOC sets USD/ CNY reference rate for today at 6.9523 (vs. estimate at 6.9334)Kiwi dollar steadies as softer NZ data clashes with hawkish RBAJapan steps up yen intervention warnings as officials signal readinessGold is back above US$5,000 as China continues to scoop it upJapan’s Nikkei above 56K, first time ever. Intervention warning issued on yen.Japan real wages fall again in December, clouding BoJ policy outlookWarsh’s Fed–Treasury accord idea sparks debate over independence and marketsUS Globex is open for the new week. US equities up while oil has opened lowerBank of England Governor Bailey’s Sunday speech follows BoE hold, keeps policy cautiousUK PM Starmer resignation rumours put Monday in focus as Mandelson scandal deepensWeak yen update: Japan election landslide Takaichi super-majority, revives yen pressureYen weaker early trade. Japan markets brace for renewed Takaichi trade after landslide win
Weekend
Newsquawk Week Ahead: US NFP and CPI, Japanese Election, UK GDP and China InflationA look at the US earnings calendar for Feb 9-13China gold reserves climb further, buying continues for a 15th straight month
At a glance:
Japanese equities surged to record highs after PM Sanae Takaichi’s landslide election win
LDP secured a lower-house supermajority, clearing the path for fiscal expansion and tax relief
JGB yields rose on expectations of heavier issuance and reflation
Yen initially weakened but later found support on intervention warnings from senior officials
FX elsewhere was range-bound; gold and silver rose, oil softened
Japanese equities surged to fresh record highs, bonds sold off and the yen initially weakened after Prime Minister Sanae Takaichi scored a landslide victory in Sunday’s snap election, the largest post-war win for any ruling party.
Takaichi’s Liberal Democratic Party captured 316 of the 465 seats in the lower house, with projections at one stage suggesting the tally could reach as high as 328 seats. Together with coalition partner Ishin, the ruling bloc has secured a two-thirds supermajority, allowing it to override the upper house and push legislation through without opposition support.
Markets read the emphatic result as providing a stable political base for Takaichi’s ambitious fiscal agenda, including higher public spending and promised tax relief. Japanese equities responded sharply. The Nikkei 225 jumped to a record above 57,300, while the broader Topix surged to an all-time high above 3,825. Japanese government bonds sold off, with yields rising on expectations of increased issuance and reflationary policy momentum.
The yen reaction was more nuanced. The initial response in early trade was renewed weakness, with the currency sliding to an all-time low against the Swiss franc and USD/JPY briefly probing above 157.70. However, intervention rhetoric quickly tempered the move.
Over the weekend, Finance Minister Satsuki Katayama warned markets against excessive currency moves, saying she stood ready to communicate with markets and remained in close contact with US Treasury Secretary Scott Bessent on dollar-yen stability. On Monday, Japan’s top currency diplomat Atsushi Mimura reinforced the message, saying authorities were watching FX developments “with a high sense of urgency” and remained in constant dialogue with markets. Further backing came from Chief Cabinet Secretary Minoru Kihara, who flagged concern over one-sided and rapid moves, language typically reserved for periods of heightened intervention risk.
That sequence helped as the yen stabilised. USD/JPY pulled back to around 156.20 before settling near 156.80 as the session progressed.
Elsewhere in FX, the US dollar was largely range-bound. EUR/USD edged slightly higher, while GBP remained under political pressure amid unconfirmed chatter around a potential resignation by UK Prime Minister Keir Starmer.
In commodities, gold and silver pushed higher, while oil traded on the softer side as US–Iran tensions eased modestly. Trading conditions were somewhat thinner than usual, with attention divided by the US Super Bowl, where the Seattle Seahawks defeated the New England Patriots 29–13.
Asia-Pac
stocks:
Japan
(Nikkei 225) +4.15%, huge leap higherHong
Kong (Hang Seng) +1.45%
Shanghai
Composite +1.12%Australia
(S&P/ASX 200) +1.89%
Takaichi is a Japanese political superwoman. She has led her party to a
landslide win in Sunday’s snap election, and the largest post-war victory
for any party.
This article was written by Eamonn Sheridan at investinglive.com.