Japanese indexes reached record highs on Wednesday amid speculation that Prime Minister Sanae Takaichi may announce a snap election, potentially scheduled for February. Reports of a sudden election occurring while the Japanese leader experiences significant popularity have intensified the phenomenon known as the “Takaichi trade.” This situation is marked by a depreciating yen, which benefits Japanese exports, and an uptick in equity markets, driven by anticipations that she will promote policies aimed at economic stimulation.
The Nikkei 225 index experienced an increase of 1.48%, surpassing the 54,000 threshold for the first occasion and achieving a peak of 54,341.23. The Topix reached a new high, increasing by 1.26% to 3,644.16. The Japanese yen has weakened beyond the 159 threshold against the dollar, marking its lowest point since July 2024, a period during which Japanese authorities intervened to halt the yen’s decline. “Around the time of Lower House elections, overseas investors tend to buy Japanese stocks, and large-cap, high-ROE, and high-beta stocks tend to perform well,” Bank of America noted in a Tuesday report.
Other Asia markets exhibited a mixed performance, as South Korea’s Kospi increased by 0.65% to 4,723.1, whereas the small-cap Kosdaq concluded 0.72% lower at 942.18. In the final hour of trading, Hong Kong’s Hang Seng index experienced an increase of 0.33%, driven primarily by consumer non-cyclical and technology sectors. Conversely, the mainland China’s CSI 300 saw a reversal of its earlier gains, concluding the session down by 0.4% at 4,741.93. Australia’s benchmark index experienced a modest increase of 0.14%, concluding the trading session at 8,820.6.
In the commodities sector, spot silver has surpassed the $90 threshold for the first time, experiencing an increase of 3.7%. The metal has emerged as one of the most significant gainers of 2025. Overnight in the U.S., all three major indexes experienced declines as investors contended with the volatility stemming from a series of proposals recently put forth by U.S. President Donald Trump. The S&P 500 experienced a decline of 0.19% as investors opted to sell JPMorgan, despite the bank reporting better-than-expected results. Meanwhile, the Dow Jones Industrial Average fell by 0.8%. The Nasdaq Composite experienced a decline of 0.1%.