Markets Mixed on Monday: Dax Drops, Nikkei Surges as Japan Welcomes First Female PM
Markets started Monday with a mix of reactions. The Dax in Frankfurt began cautiously before turning negative, while the Nikkei in Tokyo surged nearly five percent. The euro weakened against the dollar. Meanwhile, Japan elected Sanae Takaichi, a conservative politician, as the likely first female Prime Minister.
The Dax, Germany's benchmark index, opened positively but soon turned negative, closing at 24,285 points, a 0.4 percent decrease from Friday. Analysts had predicted a positive day, influenced by robust Asian gains and hopes for interest rate cuts. However, the index was affected by the US government shutdown, which is now seen as a positive factor by the market, according to Jochen Stanzl of CMC Markets. Stanzl believes the longer the USA shutdown lasts, the higher the chance of two rate cuts by the end of the year.
In Tokyo, the Nikkei soared nearly five percent in the morning, boosted by global optimism and a weaker yen. The euro was also weaker, trading at 1.1678 US dollars and 0.8563 euros per dollar. This was likely influenced by the US-China trade talks and Brexit developments.
In political news, Japan's Liberal Democratic Party (LDP) elected Sanae Takaichi as its leader. The 64-year-old conservative politician is expected to become Japan's first female Prime Minister when she assumes office on October 15, 2025. Her market-friendly policies are seen as a potential boost for the Japanese economy.
Monday's trading was marked by mixed performances in Europe and Asia. The Dax in Frankfurt ended the day lower, while the Nikkei in Tokyo surged. The US government shutdown continues to influence markets, with analysts predicting potential rate cuts. In Japan, the election of Sanae Takaichi as the likely first female Prime Minister is seen as a positive for the economy.
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