Japan’s Nikkei touches one-month-high after coalition boosts majority

TOKYO — Japan’s Nikkei index hit one-month high on Monday, after the country’s coalition government boosted its majority in the upper house of parliament in an election on Sunday.

The Nikkei share average gained 1.02% to 26,787.00 by the midday break, after rising as much as 2% to touch its highest level of 27,072.17 since June 13. The broader Topix advanced 1.08% to 1,907.90.

Prime Minister Fumio Kishida’s Liberal Democratic Party (LDP), and its junior partner Komeito won 76 of the 125 seats contested in the chamber, from 69 earlier, according to an exit poll by public broadcaster NHK.

The election was held two days after the assassination of former Prime Minister Shinzo Abe, a dominant politician and power broker.

“The market was boosted by expectations for a long-term stability of Japan’s political base,” said Maki Sawada, strategist at Nomura Securities.

“But cautions ahead of corporate earnings reports may cap gains of the Nikkei this week, and concerns over a rise in new COVID-19 cases could weigh on sentiment.”

Heavyweights Uniqlo owner Fast Retailing gained 2.14% and technology investor SoftBank Group rose 1.97%

Automaker Toyota Motor and Sony Group boosted the Topix, rising 1.52% and 1.97%, respectively.

Bucking the trend, chip-making equipment maker Tokyo Electron weighed on the Nikkei, falling 2.41%, after Nomura Securities cut a rating on the chip making equipment maker to “neutral” from “buy.”

Its peer Advantest lost 0.41%.

Yaskawa Electric, a robot maker seen as a leading indicator on Japanese manufacturers’ earnings trend, fell 4.73%after its quarterly earnings missed consensus.

(Reporting by Junko Fujita; Editing by Rashmi Aich)