Sanae Takaichi Sparks Record High for Japanese Stocks with Pro-Business Agenda
Japan’s Nikkei 225 closed above 47,000 for the first time as investors applauded the LDP’s election of Sanae Takaichi, signaling pro-business policies and potential economic stimulus.
Stocks Rally to Record High
Japanese stocks climbed to a new peak after the ruling Liberal Democratic Party appointed Sanae Takaichi as its leader, pushing the Nikkei 225 above 47,000 points for the first time. The index closed 4.75% higher on Monday, reflecting investor optimism.
Pro-Business Policies in Focus
Takaichi, who has served as minister for economic security and minister of internal affairs, is a vocal proponent of increased government spending and lower borrowing costs. A devotee of Margaret Thatcher's free-market approach, she aims to revive growth through fiscal stimulus and monetary easing.
Market Impact and Currency Reaction
Investors cheered her victory, driving gains in real estate, technology, and heavy industry stocks. Meanwhile, the yen weakened to a record low against the euro and slid 1.7% against the dollar. Japan economist Jesper Koll described the market’s response as a "knee-jerk reaction" to her likely appointment.
Road Ahead for Takaichi
If confirmed as Japan’s first female prime minister, Takaichi will face a fragile economy, slow wage growth, and high household costs. She must also manage relations with the United States, finalize a tariff agreement from the Ishiba administration, and potentially negotiate new terms with President Trump to bolster the yen.
Investors are betting that Takaichi’s fiscal stimulus will drive corporate profits but warn it may increase debt and further weaken the yen.
This topic was reported by BBC.
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