Shares of chip companies, such as Tokyo Electron Ltd. and Advantest Corp., also saw a sharp increase in value, surpassing the benchmark Topix.
The pro-stimulus conservative Sanae Takaichi‘s election victory places her as the country’s next prime minister, and expectations that they would profit from more government expenditure caused Japanese military and tech shares to surge.
At one point on Monday, the Topix index‘s measure of machinery makers reached an all-time intraday high as defense equipment manufacturers Kawasaki Heavy Industries Ltd., Japan Steel Works Ltd., and IHI Corp. all saw at least 10% increases. Shares of chip companies, such as Tokyo Electron Ltd. and Advantest Corp., also saw a sharp increase in value, surpassing the benchmark Topix.
According to Pelham Smithers, managing director of the UK-based Japan stock research company Pelham Smithers Associates Ltd., “economic security is something of a motto for Takaichi,” which is excellent news for military and tech companies. According to him, she would probably concentrate on easing regulations governing the manufacture and sale of military equipment in order to increase the stockpiles of weapons manufacturers.
Over the weekend, the governing Liberal Democratic Party chose Takaichi as its leader. Takaichi advocates for easy fiscal and monetary policies. The yen and long-term government bonds declined on Monday, although the broader stock market rose as a result.