Nikkei soars over 3% on Wall Street rally, as Abe's victory boosts confidence

Shinzo Abe, Japan's PM and president of the Liberal Democratic Party, places a red paper rose on a LDP candidate's name to indicate an upper house election victory at the party's headquarters in Tokyo, Japan, on July 10.
Shinzo Abe, Japan's PM and president of the Liberal Democratic Party, places a red paper rose on a LDP candidate's name to indicate an upper house election victory at the party's headquarters in Tokyo, Japan, on July 10.PHOTO: BLOOMBERG

TOKYO (Reuters) - Japan's Nikkei share average soared more than 3 per cent on Monday (July 11) after US stocks rose and the country's ruling coalition won a landslide victory in upper house elections, boosting confidence in the market.

The Nikkei jumped 3.6 per cent to 15,654.82 points by mid-morning trade, the highest since July 5.

Prime Minister Shinzo Abe's coalition victory is expected to bolster his grip over the conservative party that he led back to power in 2012 promising to revive the economy with hyper-easy monetary policy, fiscal spending and reforms.

"Abe's victory boosted confidence in investor sentiment, and winning a two-thirds majority sends foreign investors a message that Abe's policies will progress," said Hikaru Sato, a senior technical analyst at Daiwa Securities.

The benchmark S&P 500 stock index brushed against its record closing high on Friday as Wall Street rallied after a much-larger-than-expected jump in jobs growth confirmed the US economy has regained speed after a first-quarter lull.

All of the Topix's 33 subsectors were in positive territory.

Nintendo Co soared more than 20 per cent, extending last week's gains, on hopes that the popularity of its new Pokemon GO smartphone game will boost its results.

Panasonic Corp jumped 6.6 per cent after it said it expects strong demand for its lithium-ion batteries from Tesla Motors Inc to help more than double its annual sales of automobile-related batteries in three years.

On the other hand, Kyushu Electric Power Co fell more than 7 per cent after an anti-nuclear advocate won the Kagoshima gubernatorial election over the weekend.

Exporters were in demand, with Toyota Motor Corp rose 3.7 perc ent, Honda Motor Co gained 3.0 per cent and Tokyo Electron Ltd advanced 3.8 per cent.

The broader Topix gained 3.5 per cent to 1,252.29 and the JPX-Nikkei Index 400 added 3.4 per cent to 11,265.46.