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Markets are jolted by politics as Japan stock prices soar 4% and bitcoin reaches a record high.

Sanae Takaichi, the fiscal and monetary dove who was recently elected leader of the ruling Party, has now become Japan's first woman prime minister.

Gold reached a new record high above $3,900 on Sunday. The leading cryptocurrency, bitcoin, also rose to a lifetime-high. Investors are increasingly looking to alternative assets to store value, as the U.S. shutdown has frayed their nerves.

In the first 15 trading minutes, Japan's Nikkei rose as high as 4.3%, to an all-time high of 47,734.04, after Takaichi defeated the more moderate Shinjiro in the Liberal Democratic Party leadership vote, on Saturday. This stoked expectations for fiscal stimulus.

The yen fell 1.6%, to just above 150 dollars per yen. Short-term Japanese government bond yields also dropped to a new two-week low. Traders reduced their bets about when the Bank of Japan would resume raising interest rates.

The implied odds that the BOJ will raise interest rates by the end of this year have fallen to 41%, down from 68% last Friday.

Takaichi criticised the BOJ for raising rates a year ago as "stupid". Her recent remarks have been more restrained. She has only said that central bank policies should align with government.

In a recent research report, Morgan Stanley MUFG Securities economists stated that "we believe that concerns among investors that the new administration may pursue extreme fiscal expansion" or exert political pressure against the BOJ have been overblown." They noted that Takaichi’s stance appears "closely aligned" to BOJ Governor KazuoUeda’s "cautious" approach to policy normalization.

The majority of other major stock markets in the region, such as mainland China, South Korea, and Taiwan, were closed on holidays.

Hong Kong's Hang Seng fell 0.3% ahead of Tuesday's holiday. Australia's benchmark index fell 0.1% despite the fact that trading was thinned out by holidays across several states, including New South Wales.

U.S. S&P futures were 0.2% higher after the cash index reached a new record high on Saturday.

The U.S. Dollar gained ground against European currencies. It used its momentum against yen as a way to recover from last week's 0.5% drop against a basket major counterparts.

The euro fell 0.25% at $1.1714 and the pound sterling dropped 0.23% at $1.34385.

The last time gold changed hands was around $3904 after the price had risen as much as 0.9% to a record-breaking $3,919.59.

Bitcoin was trading at around $123,590 after its recent jump from $125,653.32 to Sunday.

Geoffrey Kendrick is the head of Standard Chartered Bank's digital assets research.

This year, bitcoin traded with "U.S. "This year, bitcoin has traded with 'U.S.

Kendrick said, "I think bitcoin will continue to rise during the shutdown" and that it will reach $135,000 soon.

The oil prices increased after OPEC+ announced that it would increase its production by 137,000 barrels a day (bpd), the same modest increase from October. This announcement came amid persistent fears of a looming glut in supply.

Sources said that Russia wanted to increase output by 137,000 bpd in order to avoid price pressure, but Saudi Arabia preferred to double, triple, or even quadruple this figure to gain market share faster.

Brent crude futures increased 1.3% to $65.39 a barrel, while U.S. West Texas intermediate crude rose by 1.4% to $61.71.

(source: Reuters)