Japan stocks hit record high after ruling party picks pro-stimulus Sanae Takaichi
Japan’s Nikkei 225 index jumped over 4% to hit a record high Monday after the country’s ruling Liberal Democratic Party elected staunch conservative Sanae Takaichi as its new leader Saturday, positioning her to become the country’s first female prime minister.
Given the government’s economic policy of a “high-pressure economy,” Takaichi is likely to ask the Bank of Japan to maintain its accommodative monetary policy, Crédit Agricole CIB wrote in a note over the weekend following the results, adding that she would be open to a 25 basis points rate hike by the BOJ by January 2026.
“A Takaichi administration, recognising that the current economy is still weak, is expected to completely shift policy direction to a new approach (complete overhaul) that seeks to expand investment and demand through public-private partnerships,” CA-CIB’s note said.
Similarly, the Topix rose over 3% to hit a record high.
The Japanese yen weakened 1.45% to trade at 149.59 against the dollar.
