The “Takaichi Trade” Unleashed a Market Tsunami Today
A Historic Rally Reshapes the Tokyo Market
Executive Summary
October 6, 2025, marks a historic day for Japanese equities, with the Nikkei 225 surging 4.75% to a new all-time high. This explosive rally was directly catalyzed by the election of Sanae Takaichi as the leader of the ruling LDP, positioning her to become Japan’s next Prime Minister. Her staunch advocacy for fiscal expansion and loose monetary policy ignited a market-wide euphoria, dubbed the “Takaichi Trade.”
Key Market Dynamics & Catalysts:
Sector Surge: Policy priorities in manufacturing, AI, and high-tech fueled exceptional gains in heavy machinery and electronics. Mitsubishi Heavy Industries (+11.17%) and Fujitsu Ltd. (+9.00%) emerged as standout performers, emblematic of the day’s momentum.
Currency & Yields: The prospect of aggressive government spending drove long-term bond yields to a 17-year high, while the Japanese Yen weakened sharply past ¥150/USD. This currency depreciation provides a significant tailwind for major exporters, boosting their international competitiveness.
Quantitative Momentum: Proprietary INSTAT analysis confirms a market flush with bullish signals, showing exceptionally high Short-Term Trend (ST) and Institutional Demand (IN) scores across a wide range of instruments, indicating concentrated buying interest.
Actionable Recommendations:
Based on the day’s data and momentum, the report issues clear guidance:
STRONG BUY: Fujitsu, Mitsui Fudosan, Mitsubishi Electric, and Hoya, which show powerful momentum and institutional support.
MODERATE BUY: Mitsubishi Heavy Industries, despite its sharp rise, remains in a favorable trend.
SELL: Nomura Holdings and Sompo Holdings are singled out for avoidance due to weak quantitative scores and negative momentum.
In summary, the Tokyo market is experiencing a powerful, politically-driven bull run. The “Takaichi Trade” has created a favorable environment for cyclicals and exporters, setting a new tone for investor strategy in the region.
Full Report
Performance Snapshot
Top 3 Performers (1-Day %)
Mitsubishi Heavy Industries (7011.T, TYO):
Fujitsu Ltd. (6702.T, TYO):
Mitsui Fudosan Co., Ltd. (8801.T, TYO):
Bottom 3 Performers (1-Day %)
Sumitomo Mitsui Finl Group (8316.T, TYO):
Mitsubishi UFJ Financial Group (8306.T, TYO):
Japan Tobacco Inc (2914.T, TYO):
Top 3 Performers (1-Week %)
Hoya Cor (7741.T, TYO):
Fujitsu Ltd. (6702.T, TYO):
Mitsubishi Electric Corp (6503.T, TYO):
Bottom 3 Performers (1-Week %)
Japan Tobacco Inc (2914.T, TYO):
Nomura Holdings Inc (8604.T, TYO):
Mitsubishi Heavy Industries (7011.T, TYO):
Top 3 Performers (1-Month %)
Mitsubishi Heavy Industries (7011.T, TYO):
Hoya Cor (7741.T, TYO):
Mitsubishi Electric Corp (6503.T, TYO):
Bottom 3 Performers (1-Month %)
Sompo Holdings Inc (8630.T, TYO):
Sumitomo Mitsui Finl Group (8316.T, TYO):
Mitsubishi UFJ Financial Group (8306.T, TYO):
Quantitative Anomalies & INSTAT Analysis
Significant Short-Term Moves ( for 1-Day or 1-Week)
Mitsubishi Heavy Industries (7011.T, TYO) ( 1-Day %)
Fujitsu Ltd. (6702.T, TYO) ( 1-Week %)
Hoya Cor (7741.T, TYO) ( 1-Week %)
INSTAT Analysis Summary
Highest AT (25):
Mitsubishi Electric Corp (6503.T, TYO)
Oriental Land Co Ltd (4661.T, TYO)
Lowest AT (0):
Nomura Holdings Inc (8604.T, TYO)
Nippon Steel Corp (5401.T, TYO)
Highest ST (25):
Mitsubishi Heavy Industries (7011.T, TYO), Fujitsu Ltd. (6702.T, TYO), Mitsui Fudosan Co., Ltd. (8801.T, TYO), Mitsubishi Electric Corp (6503.T, TYO), Hoya Cor (7741.T, TYO), Sompo Holdings Inc (8630.T, TYO), Nippon Steel Corp (5401.T, TYO), Marubeni Corp (8002.T, TYO), Itochu Corp (8001.T, TYO), Oriental Land Co Ltd (4661.T, TYO), Japan Tobacco Inc (2914.T, TYO), Nippon Yusen K.K. (9101.T, TYO), Honda Motor Co., Ltd. (7267.T, TYO), Sumitomo Mitsui Finl Group (8316.T, TYO), Mitsubishi UFJ Financial Group (8306.T, TYO)
Lowest ST (20):
Nomura Holdings Inc (8604.T, TYO)
Highest IN (50):
Mitsubishi Heavy Industries (7011.T, TYO), Fujitsu Ltd. (6702.T, TYO), Mitsui Fudosan Co., Ltd. (8801.T, TYO), Mitsubishi Electric Corp (6503.T, TYO), Hoya Cor (7741.T, TYO), Oriental Land Co Ltd (4661.T, TYO), Honda Motor Co., Ltd. (7267.T, TYO)
Lowest IN (30):
Nippon Yusen K.K. (9101.T, TYO)
Highest INST (100):
Mitsubishi Electric Corp (6503.T, TYO)
Lowest INST (70):
Nomura Holdings Inc (8604.T, TYO)
Bill Cara’s Perspective & Recommendations
The Japan dataset reflects a market demonstrating strong short-term bullish momentum, primarily driven by high (Short-Term Trend) and (Institutional Demand) scores across most instruments. The top performers exhibit extreme and returns, indicating concentrated buying interest, especially in cyclicals and high-tech sectors as evidenced by Mitsubishi Heavy Industries and Fujitsu Ltd. The overall trend is overwhelmingly positive, with the lowest score still at a high 70, suggesting broad institutional and retail support.
Recommendation
Companies (Based on INSTAT Data Only)
STRONG BUY
Fujitsu Ltd. (6702.T, TYO), Mitsui Fudosan Co., Ltd. (8801.T, TYO), Mitsubishi Electric Corp (6503.T, TYO), Hoya Cor (7741.T, TYO)
MODERATE BUY
Mitsubishi Heavy Industries (7011.T, TYO)
HOLD / MONITOR
Nippon Yusen K.K. (9101.T, TYO), Japan Tobacco Inc (2914.T, TYO), Sumitomo Mitsui Finl Group (8316.T, TYO), Mitsubishi UFJ Financial Group (8306.T, TYO)
NEUTRAL
Oriental Land Co Ltd (4661.T, TYO), Nippon Steel Corp (5401.T, TYO), Marubeni Corp (8002.T, TYO), Itochu Corp (8001.T, TYO), Honda Motor Co., Ltd. (7267.T, TYO)
SELL
Nomura Holdings Inc (8604.T, TYO), Sompo Holdings Inc (8630.T, TYO)
Information Compiled Today From Reputable Sources
The Japanese stock market experienced a massive rally on October 6, 2025, with the benchmark Nikkei 225 index surging by over 4.75% to a new all-time high. This bullish performance strongly supports the positive short-term returns seen in the proprietary data, such as the gain of 11.17% for Mitsubishi Heavy Industries (7011.T, TYO) and the 9.00% gain for Fujitsu Ltd. (6702.T, TYO).
The primary catalyst for this exceptional market move was the election of Sanae Takaichi as the leader of the ruling Liberal Democratic Party (LDP) over the weekend, putting her on track to become Japan’s next Prime Minister. Takaichi, a strong advocate for fiscal expansion and looser monetary policy, raised investor hopes for a fresh wave of government spending. Her policy priorities, which include investment in manufacturing, food security, artificial intelligence, and other high-tech sectors, drove heavy-machinery and electronics stocks higher.
The market response was a classic “Takaichi trade.” The outlook for aggressive government spending caused long-term government bond yields to spike to a 17-year high, reflecting inflation concerns and an anticipated increase in government debt issuance. Conversely, the Japanese yen weakened sharply against the dollar, falling below the Yen150 level, as investors concluded the Bank of Japan (BOJ) would likely hold off on further interest rate hikes, a view reinforced by Takaichi’s dovish economic stance. The weakening yen is a tailwind for Japanese exporters, whose goods become cheaper globally. The strong performance across all sectors in the provided dataset, even with the lowest at 0.12%, confirms a broad-based, politically-driven market euphoria for the day’s trading session.
Data Source Confirmation for External Information: The above information was compiled from reputable sources, including Reuters, Bloomberg, Morningstar, The Japan Times, and Investing.com as of October 6, 2025. No external data was used in the performance tables or recommendations.
I note that it was the recent $600m capital injection Mitsubishi into Hudbay to finance Copper World in Arizona that caused HBM to move quickly from 12 to 22 on TSX . Almost a double in less than 6 months.