Japan's Nikkei average finished above 12,850 for the first time since 2001 today after a landslide election victory for Prime Minister Junichiro Koizumi.
Mizuho Financial, Japan's biggest bank, hit an all-time high on rising confidence in the country's economic outlook, and on investor optimism that lenders would benefit from privatisation of Japan's vast postal system.
"While a Koizumi win was priced in, such a decisive victory . . . is more than most were expecting. Koizumi will now be able to push his reform agenda with a much freer hand," said Kirby Daley, strategist at Société Générale Securities's Fimat division.
Mr Koizumi's Liberal Democratic Party (LDP) and junior partner New Komeito together took 327 seats in parliament's 480-seat lower house, ensuring the coalition will be able to push through the privatisation of a postal system with $3 trillion in assets.
"Foreign investors very much credit Koizumi . . . with the economic recovery Japan is now enjoying. Strengthening (his) hand to move ahead with further reforms is exactly what investors want to see," Mr Daley said.
The Nikkei gained 204.39 points to 12,896.43, its highest close since June 29th, 2001, when it ended at 12,969.05.