Japan's Stocks Climb to Record Peaks After Appointment of Pro-Business Leader
Japanese shares have reached a record high following the nation's governing Liberal Democratic Party appointed the pro-business politician as its new chief, paving the way for her to become Japan's upcoming leader.
The benchmark Nikkei index rose by approximately four and a half percent on Monday in Tokyo, after rising past forty-seven thousand for the first time.
Takaichi, who has held senior government roles including minister for economic security and internal affairs, is known for her advocacy of increased public expenditure and reduced borrowing costs.
She is additionally a longstanding supporter of former UK prime minister the Iron Lady and her market-oriented approach to the economy.
Investor Response and Financial Effects
Investors welcomed the news of her victory in the LDP leadership race, with stocks rising in property, tech and heavy industry firms.
Although Japanese stocks gained, the yen reached a historic low against the European currency and dropped by one point seven percent against the US dollar.
The day's reaction was mostly a "immediate response" to the potential selection of the leader as prime minister, an economist an expert commented.
While her economic plans to boost the economic growth through higher government spending could benefit companies, they may further weaken the currency as Japan's debt increases, noted Mr Koll.
Political Transition and Challenges
If confirmed later this month as the replacement to Shigeru Ishiba, Takaichi will be the nation's first woman leader.
Mentored by former leader Shinzo Abe, she has supported his economic vision - known as Abenomics - of increased public spending and cheap borrowing.
If confirmed in the role, she will have to manage a difficult US-Japan relationship and see through a trade agreement with US President Donald Trump administration, which was earlier negotiated by the Ishiba government.
She would additionally have to address a slow economy and families facing higher costs and slow income increases.
With Trump scheduled to visit Japan soon, Mr Koll said she will be eager to negotiate a fresh deal with the American leader "to lower the dollar weaker and to get the Japanese currency stronger."
