Japan’s Nikkei Stock Average Rises on Improving Bets of Takaichi Becoming Next PM (Update 1)

Reuters

12:36 JST, October 16, 2025 (updated at 16:50 JST)

TOKYO, Oct 16 (Reuters) – Japan’s Nikkei share average ended more than 1% higher on Thursday, driven by improving bets of Liberal Democratic Party (LDP) leader Sanae Takaichi becoming the next prime minister, spurring hopes of a revival in big spending.

The Nikkei .N225 rose 1.27% to close at 48,277.74, and the broader Topix .TOPX gained 0.62% to 3,203.42.

The Japan Innovation Party emerged as a possible coalition partner for the LDP after its leader said the party would back Takaichi for the premiership if the two parties agreed on policy.

“The Takaichi trade is back,” said Shoichi Arisawa, general manager – investment research at IwaiCosmo Securities.

The Nikkei surged to a record high last week after Takaichi was elected as the LDP leader, paving the way for her to become the country’s next prime minister. But that expectation faded after the LDP’s long-term partner Komeito left the coalition last week, leaving the LDP and opposition parties scrambling to form new alliances.

“The Nikkei could rebound to its high scaled earlier this month. But the yen has strengthened, which is negative for domestic stocks,” Arisawa said.

The yen JPY= strengthened against the dollar earlier in the session as U.S. Treasury Secretary Scott Bessent and Japanese Finance Minister Katsunobu Kato held talks in Washington.

The Japanese currency briefly firmed to a one-week high of 150.51 per dollar but was last down 0.14% at 151.25.

Among stocks that boosted the Nikkei, technology investor SoftBank Group 9984.T surged 8.59% and chip-making equipment maker Tokyo Electron 8035.T gained 4%.

Cable maker Fujikura 5803.T, a gauge for artificial intelligence data center investments, rose 3.96%.

Renesas Electronics 6723.T surged 8.23% after Reuters reported that the chip maker was exploring a sale of its timing division in a deal that could value the business at close to $2 billion.

Shares of Osaka-based property and railway firms gained, buoyed by prospects of Osaka becoming the second capital of Japan, a policy supported by the Japan Innovation Party.

Hankyu Hanshin Holdings 9042.T rose 5.8% and Keihanshin Building 8818.T jumped 7.32%. Keihan Holdings 9045.T rose 4.14%.

Uniqlo brand owner Fast Retailing 9983.T slipped 0.53% to weigh on the Nikkei the most.