With the House of Representatives election being held on the 27th, the market rule of thumb that “elections are a good buy” has collapsed on the Tokyo Stock Exchange. In past House of Representatives elections, the Nikkei stock average has risen between the dissolution of the House of Representatives and the voting count for 17 consecutive elections since 1969. However, on the 25th, the Nikkei average closed at 37,913.92 yen, down 229.37 yen (0.60%) from the previous day. This represents a decrease of 1,023 yen 62 sen (2.62%) compared to the day before the dissolution. On this day, it was reported that the situation was delicate as to whether the ruling party would maintain a majority in the House of Representatives election, and there was a widespread movement to sell stocks in preparation for future risks. The strengthening of the yen against the dollar in the foreign exchange market also weighed on stock prices. Comparing past House of Representatives dissolutions with the business day before the election day, the Nikkei average had risen 17 consecutive times from 1969 to 2021. The highest increase was 12.1% in 2009, when the Democratic Party of Japan won a landslide victory and took power. The second highest was 10.3% in 2012, when the LDP returned to power. Asahi Shimbun Company.
>>1 In the last 20 years or so, in the elections that saw the change of government in 2009, the Democratic Party secured a stable majority or the LDP and Komeito secured a stable majority so it was expected that a stable government would be formed in the elections, so the market did not fall However, this time the LDP has about 200 seats, and the LDP and Komeito combined have about 230 seats, so they are 100 short of a majority even if the LDP and Komeito win at the most, they will only just maintain a majority so the government will become unstable, and stock prices will fall.
>>1 Because the opposition party is likely to win. If the opposition wins a landslide victory, the nightmare of the Democratic Party government will return. High school and college students need to prepare to become part of the Ice Age generation.
>>1 It can’t be helped since there are a lot of foreign investors in the market right now The average stock price would be even lower if it were just domestic.
>>2 The market judges the Ishiba administration to be a failure (down during the presidential election) Various companies are predicting a major defeat for the ruling party in this election Even if there is no change of government, the continuation of the Ishiba administration is not welcomed by the market The domestic market will cool down because the LDP and the Constitutional Democratic Party are pursuing a tax increase policy As a result, anxiety spreads and the market falls ^^.
On the 12th, former President Trump had a conversation with businessman Elon Musk on x (formerly Twitter), and made a joke regarding energy policy, referring to the Fukushima Daiichi nuclear accident, saying, “We won’t be able to get our hands on the land for 3,000 years.” China, Russia, and South Korea: “That’s right.”
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