Japan's Nikkei seen hitting new highs as yen, bonds sputter on Takaichi victory

By Rocky Swift

TOKYO (Reuters) -Japanese shares are expected to keep setting records even as the nation’s currency and bonds sputter after fiscal dove Sanae Takaichi was elected on Saturday to lead the ruling party and likely become prime minister.

Takaichi, 64, was considered to have the most expansionist fiscal and monetary agenda among five candidates in the Liberal Democratic Party race to replace hawkish Prime Minister Shigeru Ishiba.

In the lead-up to the LDP race, a “Takaichi trade” emerged – long on stocks and bearish on Japanese government bonds, particularly longer maturities – positioning for a win by Takaichi, a devotee of the “Abenomics” stimulus policies of the late Shinzo Abe.

‘POSITIVE SURPRISE’ FOR SHARES, BONDS ON EDGE

Japan’s benchmark Nikkei logged a record closing