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A landslide election win for Japanese Prime Minister Shinzo Abe weakened the Japanese yen and drove up Tokyo stocks to two-decades high, with the path now paved for further super-easy monetary policy stimulus.

Abe's ruling coalition managed to retain a two-thirds majority in Japan's lower house parliament, exit polls from Sunday's voting showed, increasing his chances to be in position to lead Japan until 2021. The premiere's renowned Abenomics program has resulted in a more-than 20 percent drop in the yen since he took office in December 2012, while the benchmark Nikkei 225 Stock Average almost increased by two-fold.

The results of the election, which puts Abe in a good political shape, the Nikkei 225 jumped up 1 percent to its highest level since 1996. The Topix index rose 0.8 percent, solidifying a rally to the highest since mid-2007.

Investors assumed the win would allow Bank of Japan to continue with massive monetary easing that curbs bond yields and the yen. The election comes ahead of a pending decision on the next leader of the Bank of Japan, so a win by Abe is expected to extend the lifespan of Abenomics.

The dollar strengthened against the yen by 0.4 percent to hit 113.99 yen, the highest level since mid-July. The Japanese currency even depreciated against the euro, which is under pressure from the Catalonia independence crisis. The single currency decline by 0.25 percent against the greenback to $1.1758.