Financial markets Monday welcomed the Democratic Party of Japan's landslide election win because it paves the way for an end to the legislative deadlock in the Diet.

The DPJ gained a sound majority in the powerful Lower House, augmenting the one it and its prospective allies already enjoy in the Upper House.

Investors drove the Nikkei 225 average up 2 percent to its intraday high for the year, but the benchmark index lost the gains to close at 10,492.53, down 0.4 percent from last Friday.