Rally replaced rout on the Tokyo Stock Market as investors sought to process the news of Donald Trump’s election win.
Just one day after the Tokyo Stock Price Index (TOPIX) plunged to its worst decline since the Brexit vote, Japan’s benchmark share index soared, posting the largest gain since February. The TOPIX climbed 5.8 percent at the close in Tokyo after slumping 4.6 percent the day before.
Attempts to explain the about-face have focused on perceived positives of a Trump presidency, like being good for companies related to infrastructure and defense, or they’ve looked at market psychology.
“It’s very mysterious,” said Toru Ibayashi, the Tokyo-based head of Japanese equity investments at UBS Group AG’s wealth management unit. “Fear dominated the market first, then people looked at what’s going to change from tomorrow. Nothing much and Mr. Trump’s victory speech was not as hostile as before. So people calmed and regained some stability. One other thing is people learned a lot from the Brexit turmoil.”