Japanese Stocks Surge 4.75% After Takaichi Wins Party Leadership

Japan's stock market surged to historic highs following the election of Sanae Takaichi as the ruling Liberal Democratic Party's leader and Japan's first female Prime Minister. The Nikkei 225 index rose approximately 4.7%, closing near 47,944, driven by investor optimism over Takaichi's commitment to continue the expansionary fiscal and monetary policies of her mentor, the late Shinzo Abe, known for 'Abenomics.' Key sectors such as real estate, technology, heavy industry, AI, and nuclear fusion-related stocks led the gains, while the yen weakened sharply against the U.S. dollar, falling below the 150 mark, raising concerns about increased import costs and the impact of higher national debt from anticipated government spending. Additionally, long-term Japanese government bond yields reached record highs, reflecting market skepticism regarding future fiscal policies under Takaichi's administration. Investors remain attentive to her upcoming cabinet appointments, especially the finance minister, which will be pivotal for economic direction and market confidence.