Ultra-Conservative Sanae Takaichi Elected Japan's New Liberal Democrats Leader
Sanae Takaichi, a prominent ultra-conservative and ally of former PM Shinzo Abe, has been elected leader of Japan's Liberal Democrats. This likely paves her way to become the next prime minister, as the party holds the most seats in the lower house.
Takaichi's election was met with enthusiasm by investors, both domestic and foreign. The Nikkei 225 index surged by over 4% to 47,835.36, reflecting optimism in the world market. The yen, however, weakened against the U.S. dollar, with the dollar rising to 149.88 Japanese yen.
Takaichi, an admirer of Margaret Thatcher, has expressed support for Abe's market-friendly policies. Her appointment comes at a time when Japan faces significant challenges, including boosting economic competitiveness, strengthening its technological and industrial base, and addressing its aging population and public debt.
Meanwhile, shares of Toyota Motor Corp. and Honda Motor Co. jumped by 4.9% and 4.7% respectively in Tokyo. This was driven by reports of potential U.S. tariff reductions. The Nikkei 225 index's rise was also influenced by the OPEC+ alliance's decision to increase oil production, with countries like Saudi Arabia, Russia, and the United Arab Emirates supporting the move.
Takaichi's election as Liberal Democrats' leader has sparked market confidence, with the Nikkei index reaching a new high. However, she faces substantial challenges in addressing Japan's economic and demographic issues. Meanwhile, automakers like Toyota and Honda have seen share prices rise due to potential U.S. tariff reductions.
