Japan’s benchmark Nikkei 225 index soared 4.5% on Monday after the ruling Liberal Democratic Party (LDP) elected ultra-conservative Sanae Takaichi as its new leader, positioning her to become Japan’s first woman prime minister.
Other major Asian markets also traded mostly higher.
Takaichi, 64, a close ally of former Prime Minister Shinzo Abe, is widely expected to continue his market-friendly “Abenomics” policies. Admired by former British Prime Minister Margaret Thatcher, Takaichi has long backed Abe’s conservative vision for Japan.
Although the LDP does not hold a full majority in the lower house, its dominance and a fragmented opposition virtually guarantee her appointment as prime minister.
Takaichi faces several daunting challenges, including revitalizing Japan’s competitiveness, strengthening its industrial base, and tackling an aging population and mounting public debt, according to analysts at BMI of Fitch Solutions.
Despite these challenges, investor sentiment turned sharply positive. Neil Newman, head of strategy at Astris Advisory Japan, said foreign investors appeared to drive Monday’s rally.
“Obviously investors like what she has been saying, and judging by which stocks moved, it seems like foreigners are leading the charge so far,” Newman said.
Market optimism was also boosted by reports suggesting U.S. President Donald Trump might consider easing some tariffs on auto parts and manufacturing materials — news that sent automakers’ shares higher. Toyota rose 4.9% and Honda gained 4.7% in Tokyo trading.
Japan’s first female LDP leader Takaichi sparks gender equality concerns
By midday, the Nikkei 225 was up 4.5% at 47,835.36, while Hong Kong’s Hang Seng index slipped 0.8% to 27,930.45. The Japanese yen weakened to 149.88 per U.S. dollar from 149.33, as expectations grew that Takaichi’s policies could lead to increased government spending and inflationary pressure. The euro eased slightly to $1.1720.
Australia’s S&P/ASX 200 edged down 0.1% to 8,977.10, while markets in mainland China, Taiwan, and South Korea remained closed for holidays.
On Wall Street, U.S. stocks ended Friday mixed but near record highs. The S&P 500 gained less than 0.1% to 6,715.79, marking its seventh positive week in the last nine. The Dow Jones Industrial Average rose 0.5% to 46,758.28, while the Nasdaq slipped 0.3% to 22,780.51.
The U.S. government shutdown, now in its third day, delayed the release of key monthly jobs data that investors were watching closely for clues about the Federal Reserve’s next moves on interest rates.
Meanwhile, oil prices rose after OPEC+ members agreed to a modest production increase of 137,000 barrels per day for November, matching October’s output hike. U.S. benchmark crude gained 88 cents to $61.76 per barrel, and Brent crude climbed 92 cents to $65.45.
Source: AP