On November 5, Japanese export-oriented stocks rose collectively, led by automakers. This followed the Democratic Party winning control of both the House and Senate in the US midterm elections, with markets expecting this outcome could constrain the Trump administration from further pursuing aggressive tariff policies and ease international trade tensions.
After the Japanese stock market opened, Toyota Motor Corp shares surged as much as 15.5%, Honda Motor Co Ltd gained more than 7%, Sony Corp rose about 7%, and Nintendo Co Ltd climbed 5%. Industrial and machinery manufacturing sectors also strengthened.
Driven by gains in export-related stocks, the TOPIX index rose as much as 2.4% during intraday trading, significantly outperforming the Nikkei 225 index, which was weighed down by declines in technology stocks. Investors are betting that with Democrats controlling both congressional chambers, Trump's ability to advance tariff measures may be constrained, thereby reducing trade policy uncertainty facing Japanese automakers and industrial manufacturers.
Additionally, following the release of the US midterm election results, international oil prices fell, easing corporate energy costs and inflation pressures. A weaker US dollar and declining US Treasury yields also provided support for stock price gains.
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