On the 14th, Japan's stock market rose across the board. $Nikkei 225 (.N225.JP)$ The Nikkei 225 rose by 1.48%, $TOPIX (.TOPIX.JP)$ and the TOPIX rose by 1.26%. Both indices hit new all-time highs, $Nikkei 225 (.N225.JP)$ with the Nikkei breaking through the 54,000-point mark for the first time and the TOPIX reaching a high of 3,644 points.
According to an online report by Yomiuri Shimbun on the 9th, Sanae Takaichi has begun considering dissolving the House of Representatives at the outset of the regular Diet session scheduled for the 23rd, which is considered the key driver behind the surge in Japan's stock market.
The market widely interprets that if a general election were held, the highly popular Takaichi administration would likely secure a victory, accelerating the implementation of policies advocated by Takaichi. Driven by this expectation, the 'Takaichi Trade' rally has been reignited.
Consequently, the 'Takaichi concept stocks,' linked to policies strongly promoted by Sanae Takaichi, led the market gains.
Among the top 20 stocks with significant inflows, 60% reached new highs.
Among the top 20 stocks with the highest net inflows from major institutional investors on the 13th, $Tokyo Electron (8035.JP)$、 $Kawasaki Heavy Industries (7012.JP)$、 $IHI (7013.JP)$、 $Mitsubishi Electric (6503.JP)$、 $Mitsui Kinzoku (5706.JP)$、 $Mitsui (8031.JP)$、 $Mitsubishi UFJ Financial Group (8306.JP)$、 $Sumitomo Metal Mining (5713.JP)$Among them, eight stocks hit their highest prices since listing.
$Toyota Motor (7203.JP)$/ $Toyota Motor (TM.US)$ 、 $Disco (6146.JP)$、 $Shin-Etsu Chemical (4063.JP)$、 $Lasertec (6920.JP)$Among these, four stocks reached their 52-week highs. Since the Japanese stock market had also been at high levels prior to the 9th, 'Takichi trading' once again became one of the factors driving the market upward.
Moreover, due to concerns that the 'responsible proactive fiscal policy' proposed by Takichi Saeko could lead to fiscal deterioration and increased issuance of government bonds, which might cause yen depreciation and rising interest rates, export-related sectors such as automobiles and the banking sector have also risen accordingly.
Will 'Takichi trading' last for more than a month?
According to reports from various media outlets, there are mainly two proposed schedules under discussion for the upcoming House of Representatives election: announcement on January 27 with voting on February 8, or announcement on February 3 with voting on February 15. The confirmation of the general election is expected to occur only after Takichi Saeko concludes her summit meetings with South Korean President Lee Jae-myung (visiting Japan on the 13th-14th) and Italian Prime Minister Giorgia Meloni (visiting Japan on the 15th-17th).
If an election is held, market attention on 'Takichi trading' may continue for about a month; even if it is not held, the topic will remain prominent at least throughout this week.
Furthermore, if a general election is conducted and the 'Second Takichi administration' secures a more stable governing foundation than before, 'Takichi trading' could potentially persist.
What are some Japanese equity ETFs available for trading?
For Hong Kong investors who do not have access to Japanese equities, there are several Japanese equity ETFs available on the Hong Kong stock market, such as $CSOP Nikkei 225 Daily (2x) Leveraged Product (07262.HK)$ 、 $Hang Seng Japan TOPIX 100 Index ETF (03410.HK)$ 、 $CSOP Nikkei 225 Index ETF (03153.HK)$ 、 $Global X Japan Global Leaders ETF (03150.HK)$ , as well as inverse leveraged products$CSOP Nikkei 225 Daily (-2x) Inverse Product (07515.HK)$ 。
Relevant Japanese ETFs in the US stock market should not be overlooked, $iShares MSCI Japan ETF (EWJ.US)$ 、 $WisdomTree Japan Hedged Equity ETF (DXJ.US)$ 、 $iShares MSCI Japan Value ETF (EWJV.US)$ are also worth paying attention to.
Editor/Rocky
