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Japanese Stocks Take Election Outcomes in Their Stride

Stocks in Tokyo have historically traded within a limited range after elections

Investors watching Japan’s general election results Sunday night are unlikely to react strongly when shares trade Monday, if recent history is a guide. In the six ballots since 2000, the Topix index has not closed more than 1.5% higher or lower on the first day after the vote, within two standard deviations, even when the Liberal Democratic Party was ousted in a landslide defeat in 2009 after 54 years of almost uninterrupted rule. Polls show that the LDP Prime Minister Shinzo Abe is on track to win the election, spelling likely continuation of the loose monetary policy Japan has deployed to kick-start its economy.

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