Nikkei clocks two-decade high as Abenomics prevails

Omkar Godbole FXStreet Contributor

Japan's benchmark equity index Nikkei jumped to a two-decade high of 21,712.9 as Yen weakened to a three-month low following Abe's win in the snap elections.

At the time of writing, the Nikkei is trading 1 percent or 224 points higher at 21,667 levels.

Abe's win clears the uncertainty surrounding BOJ's mandate following the elections. Abe's rival party, rival Kibō no Tō, had made it clear early on that it would work with the BOJ on exit strategy. It meant that under the new government, the BOJ's hands would be tied.

A victory for Abe is being taken as a victory for 'Abenomics', which is pretty much centered around currency devaluation and fiscal stimulus.

Still, Nikkei bulls need to be cautious as an escalation of tensions in the Korean Peninsula and the political crisis in Spain could strengthen Yen and derail the stock market rally.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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