日本大选高市早苗胜出！日股或借势冲新高，日元逼近160关口、国债再临抛售压力

Core Viewpoint - The overwhelming victory of Prime Minister Fumio Kishida's Liberal Democratic Party (LDP) is expected to sustain the upward trend in the Japanese stock market, while putting further downward pressure on the yen and government bonds [1][2]. Market Reaction - The LDP has secured more than two-thirds of the seats in the House of Representatives, exceeding some investors' expectations [1]. - The Nikkei index is seen as benefiting from Kishida's clearer path for economic stimulus policies, with the index reaching a historical high and gaining over 8% this year, compared to a mere 2% increase in global developed market stock indices [1]. Currency and Bond Market - The yen has depreciated, trading at 157.61 against the dollar, with a cumulative decline of 1.6% last week, nearing the 160 mark that previously triggered intervention by Japanese authorities [1][5]. - The natural trajectory of the yen is expected to be further depreciation, with market participants anticipating potential intervention from Japanese authorities at low levels [5][8]. Economic Implications - The depreciation of the yen is a double-edged sword for the Japanese economy, boosting profits for export companies while significantly squeezing household budgets [4]. - Concerns about the sustainability of Japan's fiscal policies have resurfaced, particularly in light of Kishida's proposed temporary reduction in food consumption tax, which may lead to further selling pressure on government bonds [8]. Government Bond Market - Despite some recovery in Japanese government bonds, there is still a risk of further selling, especially in ultra-long-term bonds, as global asset management firms have adopted a low allocation strategy [8]. - The overwhelming victory of the LDP may provide Kishida with more political maneuvering space, potentially allowing him to address the concerns of the bond market [11].