Japanese Stocks Surge to Record High as LDP Elects Pro-Business Leader Sanae Takaichi
The Nikkei 225 jumped past 47,000 for the first time after the ruling party chose Sanae Takaichi, a strong advocate of increased government spending and low borrowing costs, as its next leader.
Japanese shares soared Monday after the ruling Liberal Democratic Party elected Sanae Takaichi as its new leader, making her the frontrunner to succeed Prime Minister Shigeru Ishiba.
The Nikkei 225 index climbed 4.75%, closing above 47,000 for the first time as investors cheered Takaichi’s pro-spending, low-interest stance.
A former minister for economic security and internal affairs, Takaichi is a longtime admirer of Margaret Thatcher’s free-market policies and has backed bold fiscal stimulus.
Real estate, technology and heavy industry stocks led gains, though the yen slipped to a record low against the euro and fell 1.7% versus the dollar.
Japan economist Jesper Koll described the market reaction as a "knee-jerk response" to her likely premiership, noting her spending plans could boost growth but risk further yen weakness amid rising debt.
If confirmed later this month, Takaichi will be Japan’s first female prime minister, inheriting Abenomics-style policies championed by her mentor, the late Shinzo Abe.
She will also face challenges in U.S.-Japan relations, from finalizing a tariff deal with President Donald Trump to addressing sluggish domestic demand and muted wage growth.
With Trump’s visit to Japan imminent, Takaichi is expected to seek a new agreement to strengthen the yen and stabilize currency markets.
Takaichi’s election has ignited a rally in Japanese equities, reflecting optimism for pro-growth policies even as it may further weaken the yen amid higher debt levels.
This story was reported by BBC News.
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