Japanese Stocks Rally to Record High After LDP Chooses Pro-Business Leader
The Nikkei 225 surged past 47,000 as investors welcomed Sanae Takaichi’s election as LDP leader, though concerns linger over the yen's weakness.
Japanese stocks soared to record highs after the ruling Liberal Democratic Party (LDP) elected Sanae Takaichi as its new leader, positioning her to become Japan's next prime minister.
The Nikkei 225 index closed up 4.75%, surpassing 47,000 points for the first time.
Takaichi, former minister for economic security and internal affairs, advocates higher public spending and low borrowing costs. A long-time admirer of Margaret Thatcher, she supports free-market policies.
Investors welcomed her victory, lifting shares in real estate, technology and heavy industry firms. Meanwhile, the yen fell to a record low against the euro and lost 1.7% against the US dollar.
“Monday’s market reaction was largely a knee-jerk response to her expected appointment,” said Japan economist Jesper Koll. He warned that increased debt from her stimulus plans could further weaken the yen.
If confirmed later this month, Takaichi would become Japan’s first female prime minister. A protégé of the late Shinzo Abe, she embraces his “Abenomics” strategy of high spending and cheap borrowing.
She will face challenges including a sluggish economy, low wage growth and negotiations over a tariff deal with the US, agreed under the previous administration. With a state visit by President Donald Trump imminent, Koll said she will seek a new agreement “to lower the dollar and strengthen the yen.”
Investors’ optimism over Takaichi’s pro-business agenda drove the Nikkei past 47,000, even as concerns grow over the impact of higher debt on the yen.
This topic was reported by BBC News.
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