NIKKEI STOCK INDEX CLOSES AT ALL-TIME HIGH AFTER TAKAICHI BECOMES JAPAN PM

TOKYO, Oct 21 (Bernama-Kyodo) -- The Nikkei stock index closed at an all-time high on Tuesday on optimism for fresh economic steps as ruling Liberal Democratic Party head Sanae Takaichi became Japan's new prime minister, but its upside was capped by profit-taking, Kyodo News Agency reported.

The 225-issue Nikkei Stock Average ended up 130.56 points, or 0.27 per cent, from Monday at 49,316.06 after hitting an intraday record high near 50,000. The broader Topix index finished 1.05 points, or 0.03 per cent, higher at 3,249.50.

The US dollar climbed to the mid-151 yen range in Tokyo after Takaichi, known as a fiscal dove and proponent of easy monetary policy, was elected as prime minister by parliament, dealers said.

The Nikkei index ended at a record high for two consecutive days, jumping over 3 per cent on Monday and gaining further from the outset of Tuesday on hopes for expansionary fiscal policies, despite the market already having factored in Takaichi becoming the next prime minister, brokers said.

But the benchmark's upward momentum slowed in the afternoon, briefly dipping into negative territory, with investors locking in gains as Takaichi's ascent was confirmed.

"As there were no surprises and  Takaichi was elected Japan's prime minister as anticipated, investors moved to take profits for now," said Chihiro Ota, assistant general manager of investment research at SMBC Nikko Securities Inc.

Investors are now paying attention to economic measures to be implemented by the Takaichi-led government and the results of earnings by Japanese companies for the April-September period, Ota said.

The market is closely watching the new government's economic policies, as the LDP's new coalition partner, the Japan Innovation Party, appears cautious of expanding fiscal spending, brokers said.

"The ability of the JIP to formulate policies remains to be seen, so investors will carefully watch whether and how the stance of  Takaichi will change," said Maki Sawada, strategist in the Investment Content Department of Nomura Securities Co.

Receding concerns about US-China trade tensions also supported sentiment, after US President Donald Trump said Monday he wants "to be good to China" and anticipates a "fantastic deal" for both countries in his upcoming meeting with Chinese President Xi Jinping, brokers said.

-- BERNAMA-KYODO