Tokyo stocks rallied to a new record, breaking 49,000 on Monday, as Sanae Takaichi's rise to the office of prime minister became a near certainty.
The Nikkei 225 stock index gained about 2.5% less than an hour after the market opened for trading, and broke the 49,000 level for the first time in history soon after the lunch break.
The previous record, of 48,597.08, was reached on Oct. 9.
Optimism returned as the Liberal Democratic Party and the Japan Innovation Party moved closer to forming a coalition, nearly guaranteeing that Takaichi, the LDP president, will become prime minister when parliament meets this week.
Trading was been choppy in recent days after Komeito broke with the LDP and ended a 26-year coalition, raising the prospect for protracted political uncertainty and legislative gridlock.
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