Tokyo shares power ahead on Abe election victory

Hopes of a spending spree in the wake of Japanese premier Shinzo Abe’s latest election victory have sent shares in Tokyo rocketing to their biggest gains for five months.

The Nikkei’s 4% rise was its biggest advance since February and came as Abe pledged to speed up the construction of bullet trains and push forward the completion of magnetic railway networks as part of a stimulus package to support the world’s third largest economy.

Abe swept to power in 2012 with a “Three Arrows” strategy of public spending, massive monetary stimulus and structural reform to shake up Japan’s underperforming economy and boost inflation. But despite early encouragement, the economy has shrunk in five of the past 10 quarters.

The prime minister is considering up to 10 trillion yen (£75 billion) in stimulus spending, partly financed by the first issue of construction bonds for 10 years.

The positive news weakened the yen — a particularly safe haven in the wake of the Brexit vote — giving a shot in the arm to Japan’s major exporters.