TOKYO, May 8 – Tokyo’s benchmark stock index rose at the start Monday after pro-European centrist Emmanuel Macron swept his far-right rival Marine Le Pen in France’s presidential election. The Nikkei 225 added 1.35 per cent, or 263.31 points, to sit at 19,709.01, while the broader Topix index of all first-section shares climbed 1.22 per cent, or 18.85 points, to 1,569.15.
Markets breathed a sigh of relief as the vote result effectively eliminates any risk of France leaving the eurozone – a departure advocated by the eurosceptic Le Pen. The election boosted the euro against the US dollar and the yen in currency markets, with investors also upbeat after positive United States (US) jobs data on Friday. Japanese financial markets were closed from Wednesday through Friday for national holidays.
“Since the French presidential election ended with the result that markets had expected, investors’ risk appetite is on the rise. It is likely to be the same story for European and US markets (later in the day), with expectations for strong corporate earnings also supporting sentiment,” Hiroaki Hiwata, a market strategist at Toyo Securities, told AFP.
Initial estimates showed Macron, a 39-year-old former investment banker, winning between 65 per cent and 66.1 per cent of the ballots – higher than expected – and Le Pen scoring between 33.9 per cent and 35 per cent. Unknown three years ago, Macron is now poised to become one of Europe’s most powerful leaders, bringing with him a hugely ambitious agenda of political and economic reform for France and the European Union.
But many observers are sceptical about Macron’s ability to win a parliamentary majority, meaning he might have to form a coalition of lawmakers committed to his agenda. The philosophy and literature lover is inexperienced, has no political party and must try to fashion a working parliamentary majority after legislative elections next month.
His economic agenda, particularly plans to weaken labour regulations to fight stubbornly high unemployment, are likely to face fierce resistance from trade unions and his leftist opponents. The bigger question is how much of a mandate will Macron’s party get in the parliamentary elections coming up next month,” said Phil Borkin, senior economist at ANZ Bank.
He also inherits a country which is still under a state of emergency following a string of Islamist-inspired attacks since 2015 that have killed more than 230 people. Le Pen, 48, had portrayed the ballot as a contest between Macron and the “globalists” – in favour of open trade, immigration and shared sovereignty – and her “patriotic” vision of strong borders and national identities. — AFP
