Tokyo stocks surged nearly 5% Monday following the selection of Sanae Takaichi as the new leader of the ruling Liberal Democratic Party’s policy chief, a move signaling a potential shift towards more growth-oriented economic policies. The benchmark Nikkei 225 index closed at 31,856.71, its highest level in over a month.
Takaichi, a conservative known for her pro-growth stance and support for monetary easing, replaced Hiroshige Seko. Investors reacted positively to her appointment, anticipating policies that could boost corporate earnings and stimulate economic activity. Her selection comes as Japan grapples wiht persistent deflationary pressures and seeks to reignite lasting economic growth.The change in leadership within the LDP, while not guaranteeing immediate policy shifts, is being viewed as a potential catalyst for renewed economic momentum and a weaker yen, benefiting export-focused companies.
The jump in share prices was broad-based, with sectors including automobiles, technology, and financials leading the gains. The yen weakened slightly against the dollar, trading at around 149.70 yen, further supporting export competitiveness. Analysts suggest Takaichi’s emphasis on deregulation and structural reforms could also attract foreign investment.
Takaichi previously served as Minister for Internal Affairs and Communications under former Prime Minister Shinzo Abe and is a vocal advocate for nuclear energy.Her policy positions are expected to align closely with those of Prime minister Fumio Kishida, potentially facilitating the implementation of his economic agenda. The LDP is expected to announce its full leadership lineup later this week.