Japan Stocks Surge Record High After Takaichi's LDP Leadership Win

Japanese stocks surged to record highs following the election of Sanae Takaichi as leader of the ruling Liberal Democratic Party, positioning her to become Japan's first female prime minister. The Nikkei 225 index rose more than 4%, surpassing 47,000 points for the first time, driven by strong gains in real estate, technology, and heavy industry sectors, while the Topix index also reached an all-time high. Investor optimism stems from Takaichi's pro-business stance, advocacy for expansionary fiscal policies, and admiration for Margaret Thatcher's free-market principles, suggesting continuity of stimulus-heavy economic policies and possible public spending increases. Concurrently, the Japanese yen weakened significantly against the U.S. dollar and euro, benefiting export-oriented companies amid expectations of accommodative monetary policy and potential rate hikes. Takaichi's administration faces challenges including sluggish economic growth, rising living costs, stagnant wages, and complex trade relations with the U.S., especially regarding tariffs negotiated under President Donald Trump's administration. Global markets showed mixed reactions, with some regional markets closed for holidays, emphasizing Japan's significant market impact under new leadership.