Asia report: Japan leads rise as Abe consolidates strength in election

Japanese equities led Asia-Pacific markets mostly higher on Monday as markets welcomed an election win for Shinzo Abe.

A general election called by Abe delivered his desired result, with the ruling coalition on course to secure 313 seats out of the 475 available in the House of Representatives and paving the way for a continuation of economic stimulus and potential constitutional changes.

The yen fell 0.4% against the dollar which helped boost the Nikkei 225 as it climbed 1.11% to 21,696.65, the index's highest level since 1996.

"The result has effectively given Abe a fresh mandate to continue with Abenomics which means more fiscal stimulus and a prolonged period of ultra-loose monetary policy," said analyst Craig Erlam at Oanda.

"This could continue to weigh on the yen, particularly as other central banks across the globe pursue tighter monetary policy."

With the market close to a two-decade high, Morgan Stanley remained bullish on Japanese stocks. "In a market fearful of valuations, neither are historically expensive. In a market fearful of excess enthusiasm, positioning on both still looks light. And we think that both will enjoy supportive earnings trends over the next two quarters. Within Japan, our top sector is financials, given our economists’ view of an economy set to exit from deflation."

China's, India's and the majority of other major benchmarks were also higher, apart from Australia's ASX and Hong Hong's Hang Seng.

The latter was hit by weakness in property developer stocks as data showed house prices fell in 18 Chinese cities, including Beijing and Shanghai, the most since January 2016.

Prices in 44 of 70 cities climbed in September compared with 46 in August, according to the National Bureau of Statistics, with prices down in 18 cities and unchanged in eight.

Data last week showed home sales in September posted the first annual decline since March 2015.

President Xi Jinping recently renewed his call that homes are built “to be inhabited" and not for speculation, indicating greater likelihood of tightening than easing.

After the New Zealand dollar's sharp drop following the agreement to form a left-populist coalition, it seemed to have found a temporary floor at a five-months low against its US counterpart and rebounded from its one-year low against sterling to 0.5290.

In company news, struggling Singapore-listed commodities trader Noble Group revealed a major loss and said it would sell off its stake in oil business Noble Americas for around $582m as it wrestles with its debt pile.