The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) hit a two-month high of 5,023.7 points this morning, breaking through the 5,000 point resistance barrier as hopes of an economic recovery in Japan lift.
Over the weekend, the conservative Liberal Democratic Party (LDP) won the majority of the nation's Upper House election; a weaker yen is also expected to stimulate the Japanese economy. Christopher McDonald, an investment advisor for RBS Morgans, said "Don't discount the fact that the LDP now has both sides of parliament aligned to push through economic reforms."
Furthermore, the Australian market is becoming increasingly confident that the US Federal Reserve will be able to manage stimulus withdrawal after Ben Bernanke reassured the market that the bond buying program would only be tapered off when the market was ready. This has further bolstered confidence in Australia's high-yielding stocks.
A number of Australian blue chips are reflecting the encouraging signs today. Westpac (ASX: WBC) is once again leading the banks with a 1.4% gain, Telstra (ASX: TLS) is up 0.92% and Wesfarmers (ASX: WES) has risen 1.2%.
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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.
