Reignited Takaichi Trade Sparks Japan Defense, Tech Stock Rally

Japanese defense and tech stocks surged as investors piled into a trade that’ll reap benefits from more government spending expected under Sanae Takaichi’s premiership.

Defense equipment makers Mitsubishi Heavy Industries Ltd., Japan Steel Works Ltd. and IHI Corp. all jumped at least 11% on Monday, propelling the Topix index’s measure of machinery makers to an all-time high. Chip-related shares including Tokyo Electron Ltd. and Advantest Corp. also climbed, boosting the Topix sub-index of electronics stocks by the most since mid-April.