On Tuesday, Asian markets saw extended gains in response to a rally on Wall Street, with Tokyo’s Nikkei index achieving remarkable growth of over two percent, reaching new record highs. This surge was propelled by Japanese Prime Minister Sanae Takaichi's recent electoral victory, which is anticipated to lead to enhanced fiscal stimulus and substantial tax cuts. Investors seemed optimistic as the market stabilized following the volatility of the previous week, characterized by fears over AI spending impacts on technology stocks.

The optimism in Asian markets came on the heels of growing anticipation for crucial economic data from the United States, which investors hope will provide clearer insights into the trajectory of the U.S. economy and the future policy directions of the Federal Reserve regarding interest rates. This broader context suggests a phase of cautious recovery in global markets as stakeholders adjust to recent shifts in market sentiments following a tumultuous trading experience.

In Tokyo, technology stocks, key to the Nikkei's ascent over the past year, demonstrated continued strength, most notably with SoftBank displaying a significant rise of over 10 percent in its share price. Overall, the combination of favorable political developments in Japan and positive cues from the broader global market have contributed to a buoyant atmosphere among investors in Asian stock markets, indicating renewed confidence in the economic prospects following a challenging market environment.