Japanese Stocks Surge to All-Time Highs In the Wake of Selection of Pro-Business Chief
Japan's equities have hit a all-time peak following the nation's ruling LDP named the pro-business politician as its new chief, paving the way for her to be Japan's upcoming leader.
The benchmark Nikkei 225 index gained approximately 4.5% on Monday afternoon in Tokyo, after rising above forty-seven thousand for the first time.
She, who has held high-ranking positions including economic security minister and internal affairs, is known for her support of higher government spending and lower interest rates.
She is additionally a long-time admirer of ex- British leader the Iron Lady and her market-oriented approach to the economy.
Market Response and Economic Effects
Investors applauded the announcement of her win in the party leadership contest, with stocks rising in real estate, tech and heavy industry firms.
Although Japan's equities gained, the Japanese currency hit a record low against the European currency and dropped by one point seven percent against the US dollar.
Monday's reaction was mostly a "knee-jerk reaction" to the possible selection of Takaichi as prime minister, Japan economist an expert told.
Although her economic plans to boost the economy through increased public outlays could benefit companies, they may further weaken the currency as Japan's national debt increases, said the economist.
Political Change and Issues
If confirmed in the coming weeks as the successor to Shigeru Ishiba, Takaichi will be Japan's first woman prime minister.
Mentored by former leader Shinzo Abe, she has championed his economic vision - called the Abe economic policy - of high public spending and cheap borrowing.
If confirmed in the role, Takaichi will have to navigate a difficult US-Japan ties and see through a trade agreement with American leader Trump's administration, which was earlier negotiated by the previous administration.
She would also have to address a sluggish economy and families facing rising expenses and slow wage growth.
As Trump expected to travel to Japan later this month, the economist said she will be eager to discuss a new agreement with the US president "to get the US currency down and to strengthen the Japanese currency up."
