"Takai Wind in Japanese Stocks: Nikkei 225 Breaks Record"

Historical Election in Japan: Takaichi's Rise

Japan’s Nikkei 225 index surged by more than 4% on Monday after the ruling Liberal Democratic Party selected Sanae Takaichi as its new leader on Saturday, reaching an all-time high.

Background of the Surge

This development strengthens the possibility of Takaichi becoming Japan’s first female prime minister. The positive market sentiment was supported by gains in real estate, technology, and cyclical consumption stocks. For instance, shares of Yaskawa Electric Corp rose by over 20%, while Japan Steel Works increased by 14%. Additionally, Mitsubishi Heavy Industries and Kawasaki Heavy Industries gained 13% and 12%, respectively.

Financial Forecasts and Policy Expectations

Crédit Agricole, in a report released after the election results, noted that considering the government's "high-pressure economy" policy, Takaichi is likely to request the Bank of Japan (BOJ) to maintain its expansionary monetary policy. It was also stated that Takaichi could be open to the possibility of raising the BOJ's interest rates by 25 basis points by January 2026.