The Nikkei average briefly rose ¥400 and rebounded from the previous day as concerns surrounding the US midterm elections eased. Risk appetite also spread through the Tokyo market against a backdrop of higher US stocks, with buying prevailing particularly in major stocks.
In the morning session of the Tokyo stock market on the 5th, the Nikkei average opened higher and traded around ¥300 above the previous day. As views grew that concerns over US politics had eased, investors became more willing to take risks, and the Nikkei average rose by more than ¥400 at one point.
Risk appetite also strengthened in the Japanese market on the back of higher US stocks, and the Dow Jones Industrial Average rebounded sharply. Reports said the Democratic Party was increasingly likely to control both houses of Congress following the US midterm elections held on the 3rd, reducing concerns over the political developments in the United States.
The sharp fall in oil prices also supported an improvement in investor sentiment. Nearby WTI futures fell to the ¥87 range at one point, dropping substantially from the previous day's close. Expectations that lower oil prices would support the earnings outlook for Japanese companies increased buying interest in the stock market.