Japan stocks surge to record high as ruling party names pro-business leader

Japanese stocks soared to record levels after the ruling Liberal Democratic Party (LDP) elected Sanae Takaichi as its new leader, paving the way for her to become Japan’s next prime minister.

The Nikkei 225 index jumped around 4.5% on Monday afternoon in Tokyo, surpassing 47,000 points for the first time in history. Investors responded enthusiastically to the news, with strong gains seen across the real estate, technology, and heavy industry sectors.

Takaichi, a veteran politician who has served as minister for economic security and internal affairs, is widely regarded as a pro-business advocate. She supports increased government spending and low borrowing costs, policies reminiscent of the late Prime Minister Shinzo Abe’s “Abenomics” agenda.

An admirer of former UK Prime Minister Margaret Thatcher, Takaichi is known for her belief in free-market principles and fiscal stimulus as tools for growth.

However, while the stock market rallied, the Japanese yen weakened, falling to a record low against the euro and slipping 1.7% versus the US dollar.

Economist Jesper Koll told the BBC that Monday’s surge was likely a “knee-jerk reaction” to Takaichi’s expected appointment. He warned that while her policies could boost corporate profits, they may also add to Japan’s debt burden and further pressure the yen.

If officially confirmed later this month, Takaichi would become Japan’s first female prime minister, succeeding Shigeru Ishiba. Her immediate challenges will include managing a fragile economy, rising living costs, and sluggish wage growth—as well as steering Japan’s trade relations with the United States.

With US President Donald Trump set to visit Tokyo later this month, analysts expect Takaichi to prioritize discussions aimed at stabilizing the yen and renegotiating tariffs agreed under the previous administration.