Japanese stocks surged to record levels after the ruling Liberal Democratic Party (LDP) elected Sanae Takaichi as its new leader, positioning her to potentially become Japan’s first female prime minister.
The benchmark Nikkei 225 index jumped 4.75% on Monday, closing above 47,000 for the first time. Takaichi, a veteran politician who has served as minister for economic security and internal affairs, is known for her pro-business stance, advocating higher government spending and low borrowing costs.
Investors reacted positively to her victory, with shares in real estate, technology, and heavy industry companies rising sharply. However, the yen weakened, hitting a record low against the euro and dropping 1.7% against the US dollar. Japan economist Jesper Koll described the market movement as a “knee-jerk reaction” to her potential premiership.
Takaichi, a long-time admirer of former UK Prime Minister Margaret Thatcher, has championed the late Shinzo Abe’s economic policies, known as Abenomics, emphasizing public spending and cheap credit. If confirmed as prime minister later this month, she will face challenges including a sluggish economy, slow wage growth, and negotiations on tariffs with the US under President Donald Trump.
Her pro-business agenda is expected to benefit Japanese companies but could put further pressure on the yen amid rising national debt.
Source: BBC