Japan's Shares Climb to Record Peaks After Naming of Business-Friendly Chief
Japanese stocks have reached a record high following the nation's governing LDP selected Sanae Takaichi as its latest leader, paving the way for her to become the country's next leader.
The benchmark Nikkei index rose by approximately 4.5% on Monday in the capital, after climbing above forty-seven thousand for the first time.
Takaichi, who has served in high-ranking positions including economic security minister and internal affairs minister, is known for her support of increased public expenditure and reduced borrowing costs.
She is additionally a longstanding supporter of former UK leader the Iron Lady and her market-oriented approach to economics.
Market Response and Financial Impact
Investors applauded the announcement of her victory in the party leadership contest, with stocks rising in real estate, tech and industrial firms.
Although Japanese stocks rose, the Japanese currency hit a historic low against the European currency and fell by 1.7% against the US dollar.
The day's reaction was largely a "knee-jerk reaction" to the potential selection of Takaichi as prime minister, an economist Jesper Koll commented.
Although her policy proposals to stimulate the economic growth through increased public outlays could benefit companies, they may additional pressure on the currency as Japan's national debt increases, noted Mr Koll.
Leadership Transition and Issues
Should confirmed later this month as the replacement to the outgoing leader, Takaichi will be Japan's first woman leader.
Guided by late leader Abe, she has championed his policy framework - called Abenomics - of high public spending and low-cost lending.
Should appointed in the role, Takaichi will have to manage a challenging bilateral ties and implement a tariff deal with US President Donald Trump government, which was previously agreed by the Ishiba government.
She would also have to contend with a slow economic growth and families facing higher costs and slow wage growth.
As the US president scheduled to visit Japan soon, Mr Koll stated she will be eager to discuss a fresh deal with the American leader "to get the US currency weaker and to get the Japanese currency up."
