Japan’s stock market has jumped to a record high after prime minister Sanae Takaichi secured a landslide win in the snap election she called after being elected the country’s first female leader.

The Nikkei 224 index rallied 3.9% to 56,364 after her Liberal Democratic Party (LDP) won 352 seats with coalition partner Japan Innovation Party in the 465-member lower house.

The historic result puts the LDP back in full legislative control after losing its majority in 2024, a huge setback for a party that has governed the country for most of the past 70 years.

While Takaichi has proved popular with her energetic “work, work, work” mantra, she has appeared to be at odds with her finance minister in wanting a cheaper yen to help exporters.

However, the yen strengthened 0.4% against the pound with traders and investors liking the restoration of political stability.

Russ Mould, investment director at AJ Bell, said: “Investors are excited at the prospect of economic stimulus measures and the prime minister’s desire to drive corporate investment in the tech space.

“Japan’s Nikkei 225 has risen 68% since April 2025 amid a weaker yen, which makes the country’s exports more competitive from a price perspective, and a shift in the political backdrop. That’s an unusually large movement for an equity index in such a short period.”

In London, CC Japan Income & Growth (CCJI) advanced 3% to 248.25p with Schroder Japan Trust (SJG) gaining 2.7% and JPMorgan Japanese (JFJ) 1.9% while AVI Japan Opportunity (AJOT) added 1.6% and rival activist Nikkei Active Value (NAVF) rose 1.1%. Baillie Gifford Shin Nippon (BGS) and Baillie Gifford (BGFD) brought up the rear with gains of 0.4% and 0.5%.

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