Shifting Political Winds Send the Nikkei to Record Highs and French Equities Tumbling (and Bond Yields Jumping)

Risk-on roars with Japan’s surge, France plunges into crisis, and gold rallies as the 60-20-20 mix gains traction

Key Takeaways

• Takaichi Trade Fuels Global “Risk On” Sentiment: Japan’s Nikkei 225 ripped higher by +4.8% today to a new record high, and the yen slumped (dollar-yen is back above ¥150) in the wake of the new government led by Sanae Takaichi, the former economic security minister, protégé of Shinzo Abe, and often dubbed Japan’s “Iron Lady.” She is a hawk on foreign policy, but a dove on monetary policy and pro-tax stimulus. The “yen carry trade,” a volatility crusher and facilitator of the global “risk on” trade, is back in vogue.