Japanese Shares Hit Record as LDP Elects Sanae Takaichi

Japanese stocks reached record highs after the ruling Liberal Democratic Party (LDP) elected Sanae Takaichi as its new leader, paving the way for her to become Japan’s first female prime minister.

The Nikkei 225 index rose by more than 5% on Monday afternoon in Tokyo, climbing past 48,000 for the first time. The surge was driven by gains in real estate, technology and heavy industry shares.

Market Reaction and Yen Weakness

Takaichi, a close ally of the late Shinzo Abe, has advocated high government spending and low borrowing costs, echoing the Abenomics model. Investors responded positively, although the yen fell sharply, hitting a record low against the euro and sliding 1.7% against the US dollar.

Japan economist Jesper Koll told the BBC that the market rally was a «knee-jerk reaction» to the leadership change, warning that increased government debt could further weaken the currency.

Policy and Challenges Ahead

Takaichi has previously served as minister for economic security and internal affairs, and has often praised Margaret Thatcher’s free market philosophy. If confirmed as prime minister later this month, she will inherit a sluggish economy, rising living costs and strained wage growth.

She will also face pressing foreign policy challenges, including navigating US-Japan relations and renegotiating a tariff deal with President Donald Trump, who is due to visit Japan later this month. Analysts expect her to push for an agreement aimed at strengthening the yen.

Kursiv also reports that as of October 3, Japan was facing a shortage of Asahi beer and other beverages as the country’s largest drinks producer struggled to recover from a major cyberattack.