A convincing election win by Shinzo Abe and his Liberal Democratic Party(LDP) boosted Japanese equities and caused the yen to weaken.
The Nikkei 225 index rose 1% while the Japanese currency fell to a 20-month low of 84.48 yen against the US dollar.
Abe's LDP, which held on to 50 years of unbroken rule until 2009, is projected to have an overall majority in the new parliament, the BBC reports.
Japanese media project big gains for the LDP which is on course to win between 275 to 310 seats in the 480-member house.
Its ally, the small New Komeito party, looks set to win about 30 seats to possibly give the alliance a two-thirds majority in the lower house.
That would give Abe the power to over-rule parliament's upper house and help to break political deadlock.
"The Liberal Democratic Party's (LDP) big victory is in line with market expectations and it will help to keep the yen weak and share prices high, at least for now," Kyohei Morita, chief economist at Barclays Securities Japan, told the BBC.
Abe, who already served as Japan's prime minister between 2006 and 2007, has said he will take steps to revive the country's economy, including weakening the yen and fighting deflation.
He has said he will set a target of as much as 3% rate of inflation and suggested the Bank of Japan (BOJ) should even print "unlimited yen" to help counter falling prices, the BBC reports.
Abe could also look at changing the law governing the central bank. This would give him more control and ensure the BOJ supports the government's efforts to boost growth.
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