Japan's Shares Climb to Record Peaks Following Appointment of Pro-Business Chief
Japanese stocks have hit a record high following the nation's ruling LDP appointed Sanae Takaichi as its new leader, paving the way for her to be the country's upcoming prime minister.
The key Nikkei 225 index was up by approximately four and a half percent on Monday in the capital, after climbing past 47,000 for the first time.
She, who has held high-ranking positions including economic security minister and internal affairs, is recognized for her support of increased government spending and lower borrowing costs.
She is additionally a long-time admirer of former British prime minister Margaret Thatcher and her market-oriented philosophy to the economy.
Market Reaction and Economic Effects
Investors applauded the announcement of her win in the LDP leadership race, with stocks climbing in property, technology and heavy industry companies.
While Japanese stocks gained, the yen reached a historic low against the European currency and dropped by one point seven percent against the American currency.
Monday's market response was mostly a "immediate response" to the possible selection of Takaichi as prime minister, an economist Jesper Koll told.
While her economic plans to boost the economic growth through higher public outlays could benefit businesses, they may additional pressure on the yen as Japan's debt increases, noted the economist.
Leadership Transition and Challenges
If confirmed in the coming weeks as the replacement to the outgoing leader, she will be the nation's first woman leader.
Mentored by late leader Abe, she has championed his policy framework - called the Abe economic policy - of increased public spending and low-cost lending.
If confirmed in the position, she will have to manage a challenging bilateral ties and see through a tariff deal with US President Donald Trump administration, which was earlier negotiated by the previous administration.
She would also have to address a sluggish economic growth and families grappling with higher costs and slow wage growth.
As Trump expected to travel to the country soon, the economist stated Takaichi will be keen to discuss a fresh deal with the American leader "to lower the dollar weaker and to strengthen the Japanese currency stronger."
