LONDON (AP) — Markets have started the week fairly positively after Japanese election results gave the country's ruling party a majority in parliament's upper house and a mandate to push ahead economic reforms.
Preliminary results from Sunday's election show the coalition led by Shinzo Abe won a majority in the upper house. Analysts said the victory removes a roadblock to implementing its economic reform agenda.
Japan's stagnant economy is showing signs of perking up, helped by the aggressive monetary and fiscal stimulus that Abe has implemented since he took office in late December. Stocks have surged, business confidence is improving and the weaker yen has eased pressure on exporters.
Long-term growth requires measures to boost competitiveness and cope with Japan's rapidly aging population and soaring national debt.
"The win will now allow him to push on with implementing his third and final arrow, in his attempt to revive the Japanese economy which has stagnated for the last two decades," said Craig Erlam, market analyst at Alpari.
As the third-largest economy in the world, that's a potential boon for the region and that helped Asian shares post solid gains — Tokyo's Nikkei 225 gained 0.5 percent to 14,658.04.
That optimism carried through into the European trading session.
In Europe, the FTSE 100 index of leading British shares was up 0.1 percent at 6,636 while Germany's DAX rose 0.2 percent to 8.351. The CAC-40 in France was 0.3 percent higher at 3,936.
Wall Street was poised for a solid start to the week, with Dow futures and the broader S&P 500 futures up 0.1 percent.
Earnings statements from a raft of companies around the world will be closely monitored this week. Nearly a third of the S&P report this week and there's also a number of European companies due to announce their results.
The main earnings statements later are those from McDonald's and Haliburton, while the key economic release later will be existing home sales figures for June.
"More good news on U.S. housing could help dispel any negative sentiment," said Chris Beauchamp, market analyst at IG.
Investors will also keep a watch on developments in Portugal after the country's president accepted a compromise reached by the coalition government that allows it to stay in power, defusing a crisis that had roiled financial markets.
The yield on the country's benchmark 10-year bond — a gauge of investor sentiment — fell 0.28 percentage point to 6.46 percent.
Portugal has been relying on a financial bailout from its euro partners and the International Monetary Fund for over two years now and the prospect of the government collapsing over a disagreement over austerity had weighed on recent sentiment.
Earlier in Asia, China's benchmark Shanghai Composite Index added 0.6 percent to 2,004.76 despite concerns over the scale of the country's economic slowdown. Hong Kong's Hang Seng rose 0.2 percent to 21,356.03.
In the currency markets, the dollar declined to 99.99 yen from the previous trading session's 100.6 yen. The euro was up 0.2 percent at $1.3161.
Oil prices tracked equities higher, with the benchmark New York rate up 38 cents at $108.25 a barrel.