Japan stocks rise after pro-stimulus party wins vote

HONG KONG – Stock markets in Japan and China, Asia’s two biggest economies, rose Monday after Japanese conservatives who favour greater economic stimulus returned to power in a landslide election victory and China’s new leaders promised more spending if needed to underpin a wobbly economic recovery.

Japan’s Nikkei 225 index jumped 1.6 per cent to 9,891.15, its highest level since April, after the country’s Liberal Democratic Party swept back into power at weekend elections. Party chief Shinzo Abe, almost certain to become prime minister, favours increased spending on public works and setting a 3 per cent economic growth target.

“The outcome of the Japan election should help support sentiment in the region,” strategists at Credit Agricole CIB said in a research note.

In mainland China, the Shanghai Composite index rose 0.8 per cent to 2,168.00 and the smaller Shenzhen Composite index climbed 0.6 per cent to 821.17. On Sunday, China’s new Communist Party leaders under party General Secretary Xi Jinping pledged a “proactive fiscal policy” and “prudent monetary policy” in a statement carried by the official Xinhua News Agency. They were references to the willingness to boost spending if needed and keep credit easy so long as inflation stays low.

The optimism failed to rub off on other Asian markets, which retreated slightly.

South Korea’s Kospi was less than 0.1 per cent lower at 1,994.04 and Hong Kong’s Hang Seng was down 0.1 per cent at 22,584.98. Australia’s S&P/ASX 200 shed 0.2 per cent to 4,574.90. Benchmarks in Taiwan and New Zealand also fell.

On Wall Street on Friday, the Dow fell 35.71 0.3 per cent to close at 13,135.01 while the Standard & Poor’s 500 index fell 0.4 per cent to 1,413.58. The Nasdaq composite sank 0.7 per cent to 2,971.33.

In currencies, the euro weakened slightly to $1.3155 from $1.3159 in late trading Friday. The dollar fell to 83.99 Japanese from 83.46 yen.

Crude prices rose. Benchmark oil for January delivery was up 18 cents to $86.91 per barrel in electronic trading on the New York Mercantile Exchange. The contract settled at $86.73 on Friday.

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