Tokyo stocks soared 1.62 percent at the open on Monday after Japan's conservative opposition swept to victory in national polls, with promises from its leader to press for more central bank easing.
The benchmark Nikkei 225 index added 158.12 points to 9,895.68 at the start of trade, as the yen plunged in the wake of the Liberal Democratic Party's landslide win over the ruling Democratic Party of Japan.
In earlier Tokyo forex trading, the dollar soared to 84.30 yen, up from 83.52 yen in New York on Friday, and its strongest level against the Japanese currency in more than a year and a half.
The euro also soared to multi-month highs at 111.10 yen from 109.94 yen in US trade.
Premier-in-waiting Shinzo Abe, the LDP's hawkish leader, has vowed to pressure the Bank of Japan (BoJ) into more aggressive policy easing measures in a bid to inject new life into the world's third-largest economy.
Abe's central bank pledge has weighed on the yen in recent weeks as traders bet that an LDP victory would hike the likelihood of more easing from the central bank, and see the appointment of a like-minded BoJ governor after current chief Masaaki Shirakawa's term terms ends next year.
A weaker yen tends to lift local stock markets because it helps make exporters' products more competitive overseas.
Abe has vowed to bolster Japan's defences in the face of a territorial spat with China, and boost spending on infrastructure at a time when much of the tsunami-wrecked northeast remains a shell of its former self.
"The election results were very much in-line with market expectations. A relief rally is in order, helped by the stronger dollar," SMBC Nikko Securities general manager of equities Hiroichi Nishi told Dow Jones Newswires.
"Next, investors will be eager to see the kinds of concrete policy measures that the new government proposes."
Source: AFP
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