Japanese Stocks Soar to Record High as LDP Elects Pro-Business Leader Sanae Takaichi
Nikkei 225 closes above 47,000 for first time after the Liberal Democratic Party names Sanae Takaichi, signalling potential economic reforms under Japan’s prospective first female prime minister.
Japanese stocks rose sharply after the ruling Liberal Democratic Party (LDP) named Sanae Takaichi as its new leader, paving the way for her to become Japan’s next prime minister. The Nikkei 225 closed up 4.75%, ending above 47,000 for the first time. Takaichi, who served as minister for economic security and internal affairs, is known for advocating higher government spending and lower borrowing costs while drawing inspiration from Margaret Thatcher’s free-market policies.
Investors drove gains in real estate, technology and heavy industry sectors on optimism over her pro-business stance. Meanwhile, the yen weakened to record lows, dropping 1.7% against the US dollar and falling to a historic low versus the euro.
Economist Jesper Koll described Monday’s rally as a 'knee-jerk reaction' to her anticipated premiership. He warned that while her stimulus measures may boost corporate profits, they could also deepen Japan’s debt and further pressure the yen.
If she succeeds Shigeru Ishiba later this month, Takaichi will become Japan’s first female prime minister. A protégé of the late Shinzo Abe, she is expected to uphold Abe’s economic model of aggressive fiscal spending and monetary easing. She must also navigate a complex US–Japan relationship, finalise a tariff deal with President Donald Trump, and address Japan’s sluggish growth, rising household costs and stagnant wages.
With Trump scheduled to visit Japan this month, Takaichi is likely to seek a new bilateral agreement aimed at strengthening the yen and easing pressure on exporters.
Japan’s stock market rally reflects investor confidence in Takaichi’s pro-business agenda but signals potential currency challenges amid expanded fiscal stimulus.
This topic was reported by BBC.
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