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Nikkei, Bitcoin, and gold soar to new highs on the back of political waves

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 of almost $4,000 on Sunday. The leading cryptocurrency, bitcoin, also rose to its lifetime high. Investors are increasingly looking to alternative assets to store value, as the U.S. shutdown has strained nerves.

The Nikkei rose above 48,000. This was the first time in history that Takaichi had beaten the moderate Shinjiro. Koizumi at the leadership vote of the Liberal Democratic Party on Saturday. This stoked expectations for fiscal stimulus.

The yen fell as much as 2.2%, surpassing 150 dollars for the first since August 1. It also dropped as much as 1.8%, reaching a new low of 176.25 against the euro.

Concerns about Japan's finances have sent the yields on 30-year government bond to an all-time record.

The yields of short-dated Japanese government bonds fell to their lowest level in two weeks as traders reduced 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" with BOJ governor Kazuo Ueda’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 0.7% 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 0.3% higher after the cash index reached a new record high on Saturday.

The STOXX50 futures for Europe were flat with the stock market at record levels.

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

The euro fell 0.26%, to $1.1714. Sterling slipped 0.22%, to $1.3440.

Last time gold was traded, it was around $3,927. It had risen as much as 1.5% to a new record, just above $3.944.

Bitcoin was trading at around $123,600 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 rose 1.3% to $65.36 a barrel, while U.S. West Texas intermediate crude was at $61.69 a barrel. Both crudes saw a 1.3% increase.

(source: Reuters)