Highlights for the morning: Japanese market record, gold surges and Foxconn rises amid AI boom

In Japan, the Nikkei 225 index jumped nearly 5% to an all-time high after the election of Sanae Takaichi as leader of the leading LDP party, while the yen weakened to 150 per dollar. In the U.S., the ongoing shutdown forced labor unions to seek a court injunction against mass layoffs, while political uncertainty and expectations of a Fed rate cut pushed gold to a new record of nearly $4,000 per ounce. About these and other topics - in our review of key events for the morning of October 6.

Japan's Nikkei 225 index rose nearly 5 percent on Monday and hit an all-time high after the ruling Liberal Democratic Party chose conservative politician Sanae Takaichi as its new leader, paving the way for her to become the country's prime minister, CNBC reported. Takaichi could become the first woman in the position. The rise was led by shares of Yaskawa Electric, Japan Steel Works, Mitsubishi Heavy Industries and Kawasaki Heavy Industries, up 12-20%.

Analysts at Crédit Agricole CIB expect the Takaichi government to continue its "high-pressure" policy and ask the Bank of Japan to maintain a soft monetary policy, allowing a small increase in the rate not earlier than 2026. According to their assessment, the new administration will bet on stimulating investment and demand through public-private partnerships.

On the currency market, the yen weakened 1.7% to above the 150 per dollar mark. Deutsche Bank forecasts limited weakening of the currency, noting that its further fall could exacerbate domestic risks - from rising housing prices to overheating of the tourism sector.

The price of gold on Monday updated an all-time high, approaching the $4000 per ounce mark, amid the ongoing government shutdown in the U.S., Bloomberg writes. Quotes were rising to $3932 per ounce as the delay in the publication of employment data increased uncertainty about the state of the economy.

Investors are focused on private reports when making decisions in the absence of official statistics, and the Fed faces difficulties in making decisions on monetary policy, writes Bloomberg . The market is still laying the key rate cut by 0.25 p.p. by the end of the month, which supports demand for gold as a yield-free but safe asset. Since the beginning of the year, the metal has risen in price by almost 50%, helped by geopolitical tensions, the policies of the Donald Trump administration and purchases by central banks diversifying assets to move away from the dollar.

The growth is also fueled by inflows into gold-backed funds: in September, their assets increased at the highest rate in three years. Analysts note that the "reflex to buy drawdowns" in gold has strengthened among investors: despite a possible short-term correction, the long-term growth trend remains stable.

Labor unions representing hundreds of thousands of federal workers have filed a lawsuit seeking an immediate injunction against the massive layoffs they say the Donald Trump administration is preparing amid the ongoing shutdown, Bloomberg reports. The lawsuit was filed in San Francisco District Court after Trump and his advisers made statements about possible layoffs starting as early as Monday.

Kevin Hassett, the White House's chief economic adviser, said a decision on the cuts has been put on hold pending a Senate vote on a temporary budget, which is likely to fail without Democratic support. Trump himself confirmed Sunday that "layoffs are already happening," blaming the government shutdown on the opposition.

About 750,000 federal workers have been furloughed every day since early October. The unions accuse the Russell Vought-led budget office of illegally ordering staff cuts under the guise of "cost optimization" during a period of lack of funding. The White House has not yet commented on the situation.

Taiwan's Hon Hai Precision Industry (Foxconn), Nvidia's largest server partner, reported an 11% rise in revenue in the third quarter to NT$2.06 trillion ($67.6 billion), matching analysts' forecasts, Bloomberg writes. The company expects sales to increase further in the fourth quarter amid strong demand for AI equipment.

The growth was fueled by strong results in the cloud and networking segments, offsetting declines in consumer electronics, according to Bloomberg Intelligence. Foxconn said revenue from its server business more than doubled in the September quarter, while sales of Apple devices, including the iPhone 17, remain under pressure due to currency fluctuations.

The company benefits from participation in infrastructure projects of OpenAI and Nvidia, including the construction of Stargate data centers in the U.S. together with Oracle and SoftBank. Meanwhile, Foxconn continues to reduce its dependence on China due to trade risks and is expanding production in Wisconsin and Texas, which will allow it to avoid the 100 percent tariffs on chip imports announced by Donald Trump.

- Japan's broad Topix index rose by 3.3%. Benchmark Nikkei 225 - by 4.8%.

- In South Korea, the stock exchanges are closed.

- Australia's S&P/ASX 200 was little changed.

- Nasdaq 100 futures were up 0.4 percent, the S&P 500 was up 0.3 percent and the Dow Jones Industrial Average was up 0.2 percent.

This article was AI-translated and verified by a human editor