TOKYO: Japan’s stock market will be one to watch on Monday, after a parliamentary election Sunday will either reaffirm or call more deeply into question Prime Minister Shinzo Abe’s program of economic reform. Abe called the snap election last month to shore up his sway over parliament after a string of solid economic news drove Japan’s markets to their highest levels in decades. Abe’s Liberal Democractic Party is broadly expected to win in Sunday’s vote, keeping the economy and what is increasingly being seen as a successful monetary policy on an even keel. Those expectations helped Tokyo’s Nikkei 225 continue pounding out gains in the past week even as the rest of the global landscape felt some jitters. The benchmark has advanced for six straight weeks, rising 11.5% from an early September low. In the process, the index overtook its highs from June 2015 and reached its highest level since October 1996.
Japan-based stocks trading on the U.S. market have presented a challenge, with most still digging their way out from under long-term slumps in earnings and revenue. Among the exceptions, Ninetendo ( NTDOY ) is up 88% for the year and has two quarters of rebounding revenue, plus earnings in three of the past four quarters compared with year-ago losses. Sony ( SNE ) is trying to shape a bottom to a possible basing pattern as analysts project the company will report a second quarter of earnings acceleration on Oct. 31.
