The Nikkei 225 index rose 1.5% and the Japanese currency fell to a 20-month low of 84.48 yen against the US dollar.

Mr Abe has said he will implement measures to help revive the world's third-largest economy, which has been battling years of sluggish growth.

He has also promised to take steps to weaken the yen and fight deflation.

"The Liberal Democratic Party's 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," said Kyohei Morita, chief economist at Barclays Securities Japan.

Japan's economy has been hurt by a variety of factors over the past few years, not least the strength of its currency, the yen.

A strong yen makes Japanese goods more expensive to foreign buyers and also hurts profits at the country's exporters, which rely heavily on foreign sales for growth.

The Japanese currency has been volatile in recent times and rose almost 6% against the US dollar between April 2011 and November 2012, despite efforts by the policymakers to try and weaken it.

Japanese Yen v US Dollar

Last Updated at 17 Dec 2012, 00:06 GMT

¥1 buys	change	%
0.0119	0.00	-0.61

The strength of the currency has led to concerns that some Japanese manufacturers may shift a part of their operations abroad in an attempt to maintain their competitiveness, a move that would further hurt the country's economy.

Japan has also been fighting deflation or falling prices for many years, which has hurt domestic demand as consumers tend to put off their purchases in hopes of getting a better deal later on.

Before the elections, Mr Abe had said that he will implement measures directed at weakening the yen and fighting deflation.

He had even suggested that Japan's central bank, the Bank of Japan (BOJ), should print "unlimited yen" to help counter falling prices.

Analysts said that given the indications of a convincing win, Mr Abe should be able to introduce his policies, which they said may weaken the yen further.

Neil Gilbert a market strategist at GFT Forex said that the term of current governor of the Bank of Japan is scheduled to end in April neat year and Mr Abe "could get a BOJ Governor who thinks along the same lines".

"Therefore, I see the yen continuing to weaken based on Abe's policy, and the future policy of his hand-picked governor," Mr Gilbert added.