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By Junko Fujita and Rocky Swift TOKYO (Reuters) -Japan's Nikkei share gauge surged past the 46,000 level for the first time on Monday after fiscal dove Sanae Takaichi was elected to lead the ruling party and become the next prime minister. The Nikkei 225 Index jumped 2.8% to 47,061.07 in early trade, while the broader Topix was up 2.1%. The yield on the two-year Japanese government bond fell 5 basis points (bps) to 0.89%, reflecting expectations of later rate hikes by the central bank. The yen slid more than 1% against the dollar and euro. Takaichi, 64, was considered to have the most expansionist fiscal and monetary agenda among five candidates in the Liberal Democratic Party race to replace hawkish Prime Minister Shigeru Ishiba. In the lead-up to the LDP race, a "Takaichi trade" emerged – long on stocks and bearish on Japanese government bonds, particularly longer maturities – positioning for a win by the veteran lawmaker who is a devotee of the "Abenomics" stimulus policies of the late Shinzo Abe. (Reporting by Junko Fujita and Rocky Swift; Editing by Sam Holmes)

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By Emily Chow SINGAPORE (Reuters) -Oil prices rose about 1% in early trade on Monday after OPEC+ announced a more modest monthly increase in production than expected, tempering some concerns about supply additions. Brent crude futures rose 63 cents, or 1%, to $65.16 a barrel by 2310 GMT, while U.S. West Texas Intermediate crude was at $61.46, up 58 cents, or 1%. "The price jump has primarily been boosted by OPEC+'s decision for a lower-than-expected production hike next month as the group intended to buffer the recent slump in oil markets," said independent analyst Tina Teng. "However, crude prices will likely remain weak due to the gloomy global economic outlook," she added. On Sunday, the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers said it would raise production from November by 137,000 barrels per day (bpd), the same modest monthly increase as in October, amid persistent concerns over a looming supply glut. In the run-up to the meeting, sources said Russia was advocating for an output increase of 137,000 bpd to avoid pressuring prices, but Saudi Arabia would have preferred double, triple or even quadruple that figure to regain market share more quickly. "OPEC+'s decision to increase production by another 137,000 bpd in November could be manageable in light of rising supply disruptions due to tightening sanctions by the U.S. and Europe against Russia and Iran," ANZ analysts said in a note on Monday. "Meanwhile, Ukraine continued to intensify its attacks on Russian energy facilities, targeting the Kirishi refinery, one of Russia's largest refineries, with an annual processing capacity exceeding 20 million tonnes," the analysts added. The Group of Seven nations' finance ministers said last week they would take steps to increase pressure on Russia by targeting those who are continuing to increase purchases of Russian oil and facilitating circumvention of sanctions, as part of efforts to cut off Russian revenues due to Moscow's invasion of Ukraine. (Reporting by Emily Chow; Editing by Richard Chang and Jamie Freed)

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By Rocky Swift TOKYO (Reuters) -Japanese shares are expected to keep setting records even as the nation's currency and bonds sputter after fiscal dove Sanae Takaichi was elected on Saturday to lead the ruling party and likely become prime minister. Takaichi, 64, was considered to have the most expansionist fiscal and monetary agenda among five candidates in the Liberal Democratic Party race to replace hawkish Prime Minister Shigeru Ishiba. In the lead-up to the LDP race, a "Takaichi trade" emerged – long on stocks and bearish on Japanese government bonds, particularly longer maturities – positioning for a win by Takaichi, a devotee of the "Abenomics" stimulus policies of the late Shinzo Abe. 'POSITIVE SURPRISE' FOR SHARES, BONDS ON EDGE Japan's benchmark Nikkei logged a record closing high of 45,769.50 on Friday, topping the record set the week before, as investors bet whoever succeeded Ishiba would be more dovish. Short positions on the gauge have been building up recently and may now be unwound, said Resona Holdings strategist Hiroki Takei.  "This could be considered a positive surprise for stock prices," Takei said. "If short-covering is triggered, the rally could gain momentum, potentially pushing the index toward the 47,000 level." The Japanese government bond market has been on edge since late May due to waning demand among traditional buyers, decreased support from the central bank and concerns about swelling debt. The sector was dealt another blow in July, when Ishiba's coalition lost its majority in the upper house of parliament – having lost its lower house majority last year – as outsider parties campaigning on tax cuts and increased spending gained seats.  The 30-year JGB yield surged to a record 3.285% on September 8, the first trading day after Ishiba announced he was stepping down. In recent weeks, the Nikkei's momentum slowed and longer-term JGBs rallied as markets gave the edge in the LDP race to farm minister Shinjiro Koizumi and Takaichi appeared to moderate her stance, leaving sales tax cuts out of her platform and staying mostly mum on the Bank of Japan. "She seemed to have toned down her rhetoric recently but ultimately the feeling is still that she will push for looser fiscal and monetary policy," said James Athey, a fixed income manager at British investment group Marlborough. "As such, there is likely to be a negative reaction in long-end JGBs and the yen." Japan's currency closed at 147.44 per dollar on Friday, staging a 1.4% gain on the week that was the sharpest since mid-May. After her LDP victory, Takaichi told a press conference the government and central bank must work closely to ensure Japan's economy achieves demand-driven inflation backed by rising wages and corporate profits. Prices for shorter-dated JGBs, those most sensitive to central bank rates, have been on a declining trend, pushing their yields higher as evidence mounted that Japan's economy was sound enough for the BOJ to resume tightening policy. BOJ Governor Kazuo Ueda has put the central bank on a long-term path to raise interest rates and shrink its balance sheet after more than a decade of massive stimulus that was a key part of former Prime Minister Abe's economic platform. Yields on two-, five-, and 10-year JGBs have all reached levels not seen since the financial crisis in 2008 on bets the BOJ could raise rates as early as this month's meeting. Takaichi's wide support among rank-and-file LDP members will lend her cabinet a strong mandate and a heavy hand in influencing monetary policy by the BOJ, said Tohru Sasaki, chief strategist at Fukuoka Financial Group and a former BOJ official. "Takaichi will make it difficult for the BOJ to raise rates, so yields will go lower," Sasaki said. "But at the same time, she's likely to expand spending, which is negative for bonds. A steepening of the yield curve is a possible reaction." (Reporting by Rocky Swift in Tokyo; Additional reporting by Ankur Banerjee in Singapore; Editing by William Mallard)

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SINGAPORE (Reuters) -Oil prices rose about 1% at the start of trading on Monday after OPEC+ announced it would raise production from November by 137,000 barrels per day (bpd), the same modest monthly increase as in October, amid persistent worries over a looming supply glut. Brent crude futures rose 77 cents, or 1.2%, to $65.30 a barrel by 2203 GMT, while U.S. West Texas Intermediate crude was at $61.59, up 71 cents, or 1.2%. (Reporting by Emily Chow; Editing by Richard Chang)

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By Leika Kihara TOKYO (Reuters) -With Sanae Takaichi set to become Japan's prime minister, advancing expansionist economic policies, chances have risen that the central bank will avoid raising interest rates this month, though the pause may not last if it batters the yen. Takaichi, likely to become Japan's first female leader next week after winning the presidency of the ruling party on Saturday, stood out in the race as the only proponent of big spending and loose monetary policy. Parliament is expected to vote the conservative nationalist in as premier on October 15 since her Liberal Democratic Party is the largest in parliament, though this is not assured as the LDP's coalition lost its majorities in both houses under her predecessor, Shigeru Ishiba. NEW LEADER COMPLICATES BOJ RATE HIKES Upon winning the race, Takaichi made clear the government will take the lead in setting fiscal and monetary policy – and that her priority would be to reflate demand and the broader economy. Describing recent price rises as driven by higher raw-material costs, Takaichi warned it was premature to declare victory over deflation as companies start to feel the pain from President Donald Trump's U.S. tariffs. "What would be best would be to achieve demand-driven inflation, where wages would rise and drive up demand, which in turn causes moderate price rises that boost corporate profits," she told a press conference after her victory. Her ascension makes it more likely the Bank of Japan will refrain from raising rates on October 30, analysts say. "Takaichi is not seen as supportive of interest rate hikes, which could make it more difficult for the BOJ to proceed with tightening," said Kazutaka Maeda, an economist at Meiji Yasuda Research Institute. "While rate hikes may not be ruled out entirely, the central bank could adopt a more cautious and gradual approach," he said, adding the next increase may be delayed until early next year. Some analysts, however, doubt whether Takaichi will push back too hard against the BOJ's plan for slow, moderate tightening as inflation – rather than Japan's long-time curse of deflation – is now the bigger economic problem, costing Ishiba's LDP a huge election loss in July. The BOJ ended decades of massive stimulus last year, raising its policy rate to 0.5% in January on the view Japan was on the cusp of durably achieving its 2% inflation target. Before Takaichi's victory, markets were pricing in more than a 60% probability of a rate hike this month, with inflation above target for more than three years, a hawkish board split at the September policy meeting and calls for a near-term rate hike by a dovish policymaker. But Governor Kazuo Ueda kept markets guessing last week, warning of global uncertainties that could discourage firms from raising wages. "Ueda appeared to be in no rush hiking interest rates anyway. Takaichi's win will make it even more likely the BOJ will take a wait-and-see mode and hold off raising rates in October," said Mari Iwashita, executive rates strategist at Nomura Securities. At the same time, former central bank official Nobuyasu Atago said, "The BOJ faces a new challenge of creating a channel of trust and communication with Takaichi's administration, which might take some time." 'THINGS HAVE CHANGED' SINCE ABE Takaichi has been a vocal advocate of "Abenomics", a hefty mix of government spending and monetary stimulus deployed by her mentor, then-premier Shinzo Abe, to pull Japan out of deflation and ease the pain of a surging yen on the export-reliant economy. Although she has toned down comments such as calling last year's rate hike "stupid", Takaichi has retained ties with reflationist-minded lawmakers and economists who advise her on policy. Her stance contrasts with that of Ishiba and his predecessor Fumio Kishida, who nodded to the BOJ's efforts to roll back stimulus as accelerating food inflation – partly caused by higher import costs from a weak yen – hit households. With markets fully pricing in another rate increase by early next year, delaying a hike for too long could unleash sharp yen falls that would boost import prices, exacerbating inflation. Some investors expect Takaichi's win to push the dollar, now around 147 yen, above 150 yen – a level of yen weakness that drew verbal warnings from Japanese authorities in the past. "Given her reflationist streak, there's a chance Takaichi could meddle in monetary policy," said former BOJ board member Takahide Kiuchi, who expects no rate hike this month. "But I don't think her administration would force the BOJ to overhaul its rate-hike plans altogether, unless the U.S. economy weakens significantly." Diplomatic considerations could also affect Takaichi's stance on monetary policy, some analysts say. The Trump administration, which favours a weaker dollar to boost U.S. exports, has signalled displeasure over the yen's softness, with Treasury Secretary Scott Bessent saying in August the BOJ was "behind the curve" in tackling inflation. Trump is expected to visit Japan this month, with some media reporting he could arrive days before the BOJ's October 29-30 meeting. "In the past the yen was strong, so low interest rates were acceptable. Now that higher inflation is causing difficulties, it's probably harder for Takaichi to criticise monetary policy as much as before," said Tomohisa Ishikawa, chief economist at Japan Research Institute. "Things have changed from when Takaichi used to work together with Abe." (Reporting by Leika Kihara; Additional reporting by Satoshi Sugiyama, Makiko Yamazaki and Yoshifumi Takemoto; Editing by William Mallard)

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(Reuters) -Space tech firm Firefly Aerospace will acquire national security technology company SciTec for about $855 million, the company said on Sunday, just months after its Nasdaq listing, honing its portfolio at a time when U.S. military and civil programs are receiving increased investor interest. The deal, which will be funded through a combination of $300 million in cash and $555 million in Firefly shares, is set to close by the end of the year, Firefly said. In August, Texas-based firm Firefly secured a valuation of $9.84 billion after its shares surged 55.6% in their Nasdaq debut, marking the largest U.S. listing this year by a space tech firm. Firefly's acquisition of Princeton, New Jersey-headquartered SciTec will enhance its space services by integrating SciTec's defense software analytics into its systems, the company said. SciTec's core capabilities, which encompass missile warning, tracking and defense, intelligence, surveillance, among other elements, will bolster Firefly's existing launch, lunar, and in-space services. Once the deal closes, SciTec will be operated as a Firefly unit under Jim Lisowski, its current CEO, Firefly said. Rising geopolitical tensions and deteriorating international relations have put a spotlight on space and defense contractors. The deal would help Firefly strengthen its position as a space tech firm boosting its lucrative military-space prospects. Firefly has come a long way from a tumultuous past, including a bankruptcy in 2017 and the ouster of its CEO last year. In September, Firefly said its Alpha rocket booster was destroyed in a testing mishap. The incident was another interruption to Firefly's business just weeks after it closed an investigation into the failure of its Alpha rocket, which put a satellite owned by Lockheed Martin in a shallow orbit in late April, implying a mission failure. (Reporting by Gursimran Kaur in Bengaluru; editing by Diane Craft and Chizu Nomiyama)

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(Reuters) -Space tech firm Firefly Aerospace will acquire national security technology company SciTec for about $855 million.  The deal, which will be funded through a combination of $300 million in cash and $555 million in Firefly shares, is set to close by the end of the year, Firefly said. In August, Texas-based firm Firefly secured a valuation of $9.84 billion after its shares surged 55.6% in their Nasdaq debut, as investors continue to pour capital into companies aiding expansion of the U.S. space and defense program.. Firefly's acquisition of Princeton, New Jersey headquartered SciTec will enhance its space services by integrating SciTec's defense software analytics into its systems, the company said. SciTec's core capabilities, which encompass missile warning, tracking and defense, intelligence, surveillance among other elements, will bolster Firefly's existing launch, lunar, and in-space services. Once the deal closes, SciTec will be operated as a Firefly unit under Jim Lisowski, its current CEO. Rising geopolitical tensions and deteriorating international relations have put a spotlight on space and defense contractors. The deal would help Firefly strengthen its position as a space tech firm boosting its lucrative military-space prospects. Firefly has come a long way from a tumultuous past, including a bankruptcy in 2017 and a CEO ouster last year. (Reporting by Gursimran Kaur in Bengaluru; editing by Diane Craft and Chizu Nomiyama )

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(Reuters) -Space technology firm Firefly Aerospace said on Sunday that it will acquire national security technology company SciTec for about $855 million in a cash and stock deal. (Reporting by Gursimran Kaur in Bengaluru; editing by Diane Craft)

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By Olesya Astakhova, Ahmad Ghaddar and Alex Lawler LONDON/MOSCOW (Reuters) -OPEC+ will raise oil output from November by 137,000 barrels per day (bpd), it said on Sunday, opting for the same fairly modest monthly increase as in October amid persistent worries over a looming supply glut. The group comprising the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers has increased its oil output targets by more than 2.7 million bpd this year, equating to about 2.5% of global demand. The shift in policy after years of cuts is designed to regain market share from rivals such as U.S. shale producers. SUPPLY GLUT SEEN IN FOURTH QUARTER Brent prices fell below $65 per barrel on Friday, as most analysts predict a supply glut in the fourth quarter and in 2026 due to slower demand and rising U.S. supply. Prices are trading below this year's peaks of $82 per barrel but above $60 per barrel seen in May. In the run-up to the meeting, Russia and Saudi Arabia, the two biggest producers in the OPEC+ group, had different views, sources have said. Russia was advocating for a modest output increase, the same as in October, to avoid pressuring oil prices and because it would struggle to raise output owing to sanctions over its war in Ukraine, two sources said this week. Saudi Arabia would have preferred double, triple or even quadruple that figure – 274,000 bpd, 411,000 bpd or 548,000 bpd respectively – because it has spare capacity and wants to regain market share more quickly, sources said ahead of the meeting. OPEC views the global economic outlook as steady and market fundamentals as healthy because of low oil inventories, it said in a statement on Sunday. WALKING A TIGHTROPE Scott Shelton at TP ICAP Group said oil prices may rise on Monday by up to $1 per barrel as the November production increase turned out to be modest. Jorge Leon at Rystad Energy said: "OPEC+ stepped carefully after witnessing how nervous the market had become … The group is walking a tightrope between maintaining stability and clawing back market share in a surplus environmen." OPEC+ output cuts had peaked in March, amounting to 5.85 million bpd in total. The cuts were made up of three elements: voluntary cuts of 2.2 million bpd, 1.65 million bpd by eight members and a further 2 million bpd by the whole group. The eight producers plan to fully unwind one element of those cuts – 2.2 million bpd – by the end of September. For October, they started removing the second layer of 1.65 million bpd with the increase of 137,000 bpd. The eight producers will meet again on Nov. 2. (Reporting by Alex Lawler, Ahmad Ghaddar, Olesya Astakhova, Seher Dareen and Dmitry Zhdannikov; Writing by Dmitry Zhdannikov and Alex Lawler; Editing by David Goodman and David Holmes)

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By Saqib Iqbal Ahmed NEW YORK (Reuters) -The U.S. government shutdown tops investors' agenda next week as markets head into the seasonally strong fourth quarter, with equities near record highs bracing for an earnings-season test later this month. A deep partisan rift in Washington led to a federal government shutdown that risks delaying crucial economic data and could potentially muddy the Federal Reserve's policy-easing outlook. Few on Wall Street expect the Washington impasse to derail a rally that has lifted the S&P 500 by 14% to repeated record highs, but with little in the way of major data or earnings, the Capitol Hill drama is set to dominate investor focus. "The shutdown and the potential reopening … that's going to get almost all investor attention," said Mark Hackett, chief market strategist at Nationwide. Investors' main worry is that the shutdown will suspend the flow of timely economic data. Should the data drought last several weeks, it could cause confusion about the Fed's monetary policy path, as the central bank will be without government data that helps guide its decisions. It also poses a possible drag on economic growth the longer it extends. But for now, there is little reason to panic, investors said. BULLS IN CHARGE Despite some softness in labor data, the U.S. economy has borne the onslaught of trade and tariff headlines well and corporate earnings have supported stocks' march higher. Analysts as of Thursday expected earnings from S&P 500 companies to increase 8.8% in the third quarter from a year ago, up from forecasts of 8.0% growth at the start of July, according to LSEG data. "In my opinion, lack of data actually puts more burden of proof on bears than it does on bulls," Hackett said. Investors will get a taste of the upcoming earnings season, with Levi Strauss and Delta Air Lines set to report results on Thursday. "The most likely scenario is the market's just kind of calm … moving sideways during the shutdown," Hackett said. KEY Advisors Wealth Management CEO Eddie Ghabour, who sees the shutdown possibly stretching for two to four weeks, echoed the sentiment. "If we're right on the shutdown stretching out, if you get extra stimulus in the economy in the form of two more rate cuts, and then the government is back in business, you're going to see a huge re-acceleration of growth in the economy and the equity markets," Ghabour said. Investors will get a read on what Fed policymakers were thinking when they cut rates in September when the minutes of that meeting are released on Wednesday. SEASONALLY STRONG For stock bulls, it helps that the just-started fourth quarter is historically the S&P 500's strongest, with an average gain of about 2.9% and a high share of positive returns, according to LSEG data going back to 1928. "Despite headline risks and the potential for short-term volatility, the weight of the evidence continues to support a constructive stance," Keith Lerner, co-chief investment officer at Truist Advisory Services, said in a note on Thursday. "As always, we will continue to follow the weight of the evidence." Meanwhile, the market's strong momentum has stock bears in hibernation. The S&P 500 logged its 30th record closing high of the year on Thursday. "The shutdown is going to be the news, but I think the underlying backdrop is really three things, seasonality, which is positive, the tailwind of rate cuts to protect the labor market … and we have momentum in the markets," said Sonu Varghese, global macro strategist at Carson Group. "We've been overweight equities and we are continuing to be that," he said. (Reporting by Saqib Iqbal Ahmed; Additional reporting by Laura Matthews; Editing by Alden Bentley and Jamie Freed)

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