Japan stocks surge over 3 percent leading Asian markets as pro-stimulus Sanae Takaichi chosen by ruling party
Sanae Takaichi Elected as First Female Leader of Japan’s LDP
Takaichi’s Election Sparks Market Surge
The Liberal Democratic Party (LDP) in Japan has elected Sanae Takaichi as its first female leader, a landmark decision that positions her to potentially become Japan’s next prime minister. This historic election, held on October 4, 2025, has already influenced financial markets, with Japan’s Nikkei 225 index jumping over 4% to reach a record high. The election is seen as a pivotal moment for Japan’s political and economic landscape.
Economic Policies Under Takaichi’s Leadership
Known for her conservative stance, Takaichi is anticipated to steer Japan towards a “high-pressure economy.” Crédit Agricole CIB commented in a weekend note that the new leader is expected to urge the Bank of Japan to maintain its accommodating monetary policy. There is also a possibility of a 25 basis points rate hike by January 2026, which would mark a significant shift in Japan’s monetary strategy. Under Takaichi, policies are expected to focus on fostering investment and demand through public-private partnerships.
Impact on Global Markets
Following the election news, not only did the Nikkei 225 see a substantial increase, but the Topix also rose over 3% to a record high. In currency markets, the Japanese yen weakened by 1.45%, trading at 149.59 against the dollar. Other regional markets reacted as well; Australia’s ASX/S&P 200 edged up by 0.19%, while Hong Kong’s Hang Seng Index showed slight increases in its futures contracts. Notably, Chinese and South Korean markets were closed for holidays.
U.S. Markets React to Global Trends
Despite the ongoing U.S. government shutdown entering its third day, U.S. markets closed higher last Friday. The S&P 500 reported a marginal increase of 0.01% to 6,715.79 after retreating from a record high. Meanwhile, the Nasdaq Composite dipped by 0.28%, settling at 22,780.51. The Dow Jones Industrial Average outperformed with a rise of 238.56 points, or 0.51%, finishing at 46,758.28. Additionally, the Russell 2000 gained 0.72%, closing at 2,476.18.
This article is based on reports and contributions from CNBC’s Pia Singh and Sean Conlon, with Emegypt providing additional regional insights.
