Japan's Stocks Soar to All-Time Peaks After Naming of Business-Friendly Chief
Japan's shares have hit a all-time high after the country's ruling Liberal Democratic Party named Sanae Takaichi as its new chief, positioning her to become Japan's next prime minister.
The benchmark Nikkei 225 index was up by approximately 4.5% on Monday afternoon in Tokyo, after rising above 47,000 for the first time.
She, who has held senior government roles including minister for economic security and internal affairs, is recognized for her support of increased government spending and lower borrowing costs.
She is additionally a long-time admirer of ex- British leader Margaret Thatcher and her free market approach to the economy.
Market Response and Financial Impact
Investors welcomed the announcement of her victory in the party leadership contest, with shares rising in real estate, technology and heavy industry firms.
Although Japan's equities rose, the yen hit a record low against the European currency and dropped by one point seven percent against the US dollar.
Monday's market response was largely a "knee-jerk reaction" to the potential selection of Takaichi as the nation's leader, an economist an expert told.
Although her policy proposals to boost the economy through higher government spending could help companies, they may additional pressure on the currency as Japan's debt increases, said the economist.
Political Transition and Challenges
If approved later this month as the replacement to Shigeru Ishiba, Takaichi will be the nation's first woman leader.
Mentored by late Prime Minister Abe, she has supported his policy framework - known as the Abe economic policy - of high government expenditure and cheap lending.
Should confirmed in the role, she will have to manage a difficult bilateral ties and implement a tariff deal with American leader Trump's administration, which was previously agreed by the Ishiba government.
She would also have to address a slow economy and families facing rising expenses and stagnant wage growth.
With the US president scheduled to visit Japan later this month, the economist stated Takaichi will be eager to negotiate a fresh deal with the US president "to get the dollar down and to get the Japanese currency stronger."
