Japan Stocks Surge to Record Highs Following Sanae Takaichi’s LDP Leadership Win

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph --> In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph --> Elsewhere in the Asia-Pacific region, Australia’s ASX/S&P 200 closed flat at 8,981.4. Hong Kong’s Hang Seng Index declined 0.22%, while the Hang Seng Tech Index dropped 0.66%. Markets in China and South Korea were closed for holidays. !-- wp:paragraph -->

US Markets Close Higher Amid Government Shutdown

In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph --> The yield on Japan’s 30-year government bond rose by over 10 basis points to 3.263%, while the 20-year bond yield increased by more than six basis points to 2.674%. The 10-year benchmark yield remained relatively stable at approximately 1.659%. !-- wp:paragraph -->

Mixed Performance in Asia-Pacific Markets

Elsewhere in the Asia-Pacific region, Australia’s ASX/S&P 200 closed flat at 8,981.4. Hong Kong’s Hang Seng Index declined 0.22%, while the Hang Seng Tech Index dropped 0.66%. Markets in China and South Korea were closed for holidays. !-- wp:paragraph -->

US Markets Close Higher Amid Government Shutdown

In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph --> The Japanese yen depreciated sharply by over 1.81%, breaching the psychological 150 level against the US dollar. This marks the first time since August that the yen has weakened to this extent, triggering concerns from Finance Minister Katsunobu Kato about potential market instability. !-- wp:paragraph --> Historically, the yen’s fall beyond 151 in October 2022 led to intervention by Japan’s Ministry of Finance. Deutsche Bank analysts suggest near-term declines toward 150 are likely but do not expect significant weakness beyond this threshold. !-- wp:paragraph -->

“A weak yen has been contributing to domestic concerns from overtourism to property price, so further weakness from already depressed levels could be unwelcome even for the government.”

Deutsche Bank analysts

Japanese Government Bond Yields Climb

The yield on Japan’s 30-year government bond rose by over 10 basis points to 3.263%, while the 20-year bond yield increased by more than six basis points to 2.674%. The 10-year benchmark yield remained relatively stable at approximately 1.659%. !-- wp:paragraph -->

Mixed Performance in Asia-Pacific Markets

Elsewhere in the Asia-Pacific region, Australia’s ASX/S&P 200 closed flat at 8,981.4. Hong Kong’s Hang Seng Index declined 0.22%, while the Hang Seng Tech Index dropped 0.66%. Markets in China and South Korea were closed for holidays. !-- wp:paragraph -->

US Markets Close Higher Amid Government Shutdown

In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph --> The Japanese yen depreciated sharply by over 1.81%, breaching the psychological 150 level against the US dollar. This marks the first time since August that the yen has weakened to this extent, triggering concerns from Finance Minister Katsunobu Kato about potential market instability. !-- wp:paragraph --> Historically, the yen’s fall beyond 151 in October 2022 led to intervention by Japan’s Ministry of Finance. Deutsche Bank analysts suggest near-term declines toward 150 are likely but do not expect significant weakness beyond this threshold. !-- wp:paragraph -->

“A weak yen has been contributing to domestic concerns from overtourism to property price, so further weakness from already depressed levels could be unwelcome even for the government.”

Deutsche Bank analysts

Japanese Government Bond Yields Climb

The yield on Japan’s 30-year government bond rose by over 10 basis points to 3.263%, while the 20-year bond yield increased by more than six basis points to 2.674%. The 10-year benchmark yield remained relatively stable at approximately 1.659%. !-- wp:paragraph -->

Mixed Performance in Asia-Pacific Markets

Elsewhere in the Asia-Pacific region, Australia’s ASX/S&P 200 closed flat at 8,981.4. Hong Kong’s Hang Seng Index declined 0.22%, while the Hang Seng Tech Index dropped 0.66%. Markets in China and South Korea were closed for holidays. !-- wp:paragraph -->

US Markets Close Higher Amid Government Shutdown

In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph --> Market analysts expect Takaichi to advocate continued accommodative monetary policy from the Bank of Japan (BOJ), albeit with openness to a modest 25-basis-point rate hike by January 2026. Crédit Agricole CIB noted that the new administration is likely to overhaul economic policy to stimulate investment and demand through stronger public-private cooperation. !-- wp:paragraph -->

“A Takaichi administration, recognising that the current economy is still weak, is expected to completely shift policy direction to a new approach (complete overhaul) that seeks to expand investment and demand through public-private partnerships,” Crédit Agricole CIB stated.

Yen Weakens Past 150 Against US Dollar, Raising Intervention Concerns

The Japanese yen depreciated sharply by over 1.81%, breaching the psychological 150 level against the US dollar. This marks the first time since August that the yen has weakened to this extent, triggering concerns from Finance Minister Katsunobu Kato about potential market instability. !-- wp:paragraph --> Historically, the yen’s fall beyond 151 in October 2022 led to intervention by Japan’s Ministry of Finance. Deutsche Bank analysts suggest near-term declines toward 150 are likely but do not expect significant weakness beyond this threshold. !-- wp:paragraph -->

“A weak yen has been contributing to domestic concerns from overtourism to property price, so further weakness from already depressed levels could be unwelcome even for the government.”

Deutsche Bank analysts

Japanese Government Bond Yields Climb

The yield on Japan’s 30-year government bond rose by over 10 basis points to 3.263%, while the 20-year bond yield increased by more than six basis points to 2.674%. The 10-year benchmark yield remained relatively stable at approximately 1.659%. !-- wp:paragraph -->

Mixed Performance in Asia-Pacific Markets

Elsewhere in the Asia-Pacific region, Australia’s ASX/S&P 200 closed flat at 8,981.4. Hong Kong’s Hang Seng Index declined 0.22%, while the Hang Seng Tech Index dropped 0.66%. Markets in China and South Korea were closed for holidays. !-- wp:paragraph -->

US Markets Close Higher Amid Government Shutdown

In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph --> Following the LDP leadership announcement, Japan’s Nikkei 225 index soared 4.75% to close at an unprecedented 47,944.76 on Monday. The Topix index also hit an all-time high, rising 3.1% to 3,226.06. !-- wp:paragraph --> The rally was broadly supported by gains in real estate, technology, and consumer cyclical stocks. Notable performers included Yaskawa Electric Corp, which jumped over 20%, Japan Steel Works up 14%, and heavy industry giants Mitsubishi Heavy Industries and Kawasaki Heavy Industries, which rose 13% and 12%, respectively. !-- wp:paragraph -->

Monetary Policy Expectations Under Takaichi Administration

Market analysts expect Takaichi to advocate continued accommodative monetary policy from the Bank of Japan (BOJ), albeit with openness to a modest 25-basis-point rate hike by January 2026. Crédit Agricole CIB noted that the new administration is likely to overhaul economic policy to stimulate investment and demand through stronger public-private cooperation. !-- wp:paragraph -->

“A Takaichi administration, recognising that the current economy is still weak, is expected to completely shift policy direction to a new approach (complete overhaul) that seeks to expand investment and demand through public-private partnerships,” Crédit Agricole CIB stated.

Yen Weakens Past 150 Against US Dollar, Raising Intervention Concerns

The Japanese yen depreciated sharply by over 1.81%, breaching the psychological 150 level against the US dollar. This marks the first time since August that the yen has weakened to this extent, triggering concerns from Finance Minister Katsunobu Kato about potential market instability. !-- wp:paragraph --> Historically, the yen’s fall beyond 151 in October 2022 led to intervention by Japan’s Ministry of Finance. Deutsche Bank analysts suggest near-term declines toward 150 are likely but do not expect significant weakness beyond this threshold. !-- wp:paragraph -->

“A weak yen has been contributing to domestic concerns from overtourism to property price, so further weakness from already depressed levels could be unwelcome even for the government.”

Deutsche Bank analysts

Japanese Government Bond Yields Climb

The yield on Japan’s 30-year government bond rose by over 10 basis points to 3.263%, while the 20-year bond yield increased by more than six basis points to 2.674%. The 10-year benchmark yield remained relatively stable at approximately 1.659%. !-- wp:paragraph -->

Mixed Performance in Asia-Pacific Markets

Elsewhere in the Asia-Pacific region, Australia’s ASX/S&P 200 closed flat at 8,981.4. Hong Kong’s Hang Seng Index declined 0.22%, while the Hang Seng Tech Index dropped 0.66%. Markets in China and South Korea were closed for holidays. !-- wp:paragraph -->

US Markets Close Higher Amid Government Shutdown

In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph --> Following the LDP leadership announcement, Japan’s Nikkei 225 index soared 4.75% to close at an unprecedented 47,944.76 on Monday. The Topix index also hit an all-time high, rising 3.1% to 3,226.06. !-- wp:paragraph --> The rally was broadly supported by gains in real estate, technology, and consumer cyclical stocks. Notable performers included Yaskawa Electric Corp, which jumped over 20%, Japan Steel Works up 14%, and heavy industry giants Mitsubishi Heavy Industries and Kawasaki Heavy Industries, which rose 13% and 12%, respectively. !-- wp:paragraph -->

Monetary Policy Expectations Under Takaichi Administration

Market analysts expect Takaichi to advocate continued accommodative monetary policy from the Bank of Japan (BOJ), albeit with openness to a modest 25-basis-point rate hike by January 2026. Crédit Agricole CIB noted that the new administration is likely to overhaul economic policy to stimulate investment and demand through stronger public-private cooperation. !-- wp:paragraph -->

“A Takaichi administration, recognising that the current economy is still weak, is expected to completely shift policy direction to a new approach (complete overhaul) that seeks to expand investment and demand through public-private partnerships,” Crédit Agricole CIB stated.

Yen Weakens Past 150 Against US Dollar, Raising Intervention Concerns

The Japanese yen depreciated sharply by over 1.81%, breaching the psychological 150 level against the US dollar. This marks the first time since August that the yen has weakened to this extent, triggering concerns from Finance Minister Katsunobu Kato about potential market instability. !-- wp:paragraph --> Historically, the yen’s fall beyond 151 in October 2022 led to intervention by Japan’s Ministry of Finance. Deutsche Bank analysts suggest near-term declines toward 150 are likely but do not expect significant weakness beyond this threshold. !-- wp:paragraph -->

“A weak yen has been contributing to domestic concerns from overtourism to property price, so further weakness from already depressed levels could be unwelcome even for the government.”

Deutsche Bank analysts

Japanese Government Bond Yields Climb

The yield on Japan’s 30-year government bond rose by over 10 basis points to 3.263%, while the 20-year bond yield increased by more than six basis points to 2.674%. The 10-year benchmark yield remained relatively stable at approximately 1.659%. !-- wp:paragraph -->

Mixed Performance in Asia-Pacific Markets

Elsewhere in the Asia-Pacific region, Australia’s ASX/S&P 200 closed flat at 8,981.4. Hong Kong’s Hang Seng Index declined 0.22%, while the Hang Seng Tech Index dropped 0.66%. Markets in China and South Korea were closed for holidays. !-- wp:paragraph -->

US Markets Close Higher Amid Government Shutdown

In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph --> Sanae Takaichi was elected leader of Japan’s ruling Liberal Democratic Party (LDP) on Saturday, becoming the party’s first female leader. Her victory positions her as the likely next prime minister, marking a significant political milestone for Japan. !-- wp:paragraph --> Takaichi is known for her conservative stance and is expected to pursue a “high-pressure economy” strategy, emphasizing expanded investment and demand through public-private partnerships. !-- wp:paragraph -->

Nikkei 225 Surges to Record Highs on Leadership News

Following the LDP leadership announcement, Japan’s Nikkei 225 index soared 4.75% to close at an unprecedented 47,944.76 on Monday. The Topix index also hit an all-time high, rising 3.1% to 3,226.06. !-- wp:paragraph --> The rally was broadly supported by gains in real estate, technology, and consumer cyclical stocks. Notable performers included Yaskawa Electric Corp, which jumped over 20%, Japan Steel Works up 14%, and heavy industry giants Mitsubishi Heavy Industries and Kawasaki Heavy Industries, which rose 13% and 12%, respectively. !-- wp:paragraph -->

Monetary Policy Expectations Under Takaichi Administration

Market analysts expect Takaichi to advocate continued accommodative monetary policy from the Bank of Japan (BOJ), albeit with openness to a modest 25-basis-point rate hike by January 2026. Crédit Agricole CIB noted that the new administration is likely to overhaul economic policy to stimulate investment and demand through stronger public-private cooperation. !-- wp:paragraph -->

“A Takaichi administration, recognising that the current economy is still weak, is expected to completely shift policy direction to a new approach (complete overhaul) that seeks to expand investment and demand through public-private partnerships,” Crédit Agricole CIB stated.

Yen Weakens Past 150 Against US Dollar, Raising Intervention Concerns

The Japanese yen depreciated sharply by over 1.81%, breaching the psychological 150 level against the US dollar. This marks the first time since August that the yen has weakened to this extent, triggering concerns from Finance Minister Katsunobu Kato about potential market instability. !-- wp:paragraph --> Historically, the yen’s fall beyond 151 in October 2022 led to intervention by Japan’s Ministry of Finance. Deutsche Bank analysts suggest near-term declines toward 150 are likely but do not expect significant weakness beyond this threshold. !-- wp:paragraph -->

“A weak yen has been contributing to domestic concerns from overtourism to property price, so further weakness from already depressed levels could be unwelcome even for the government.”

Deutsche Bank analysts

Japanese Government Bond Yields Climb

The yield on Japan’s 30-year government bond rose by over 10 basis points to 3.263%, while the 20-year bond yield increased by more than six basis points to 2.674%. The 10-year benchmark yield remained relatively stable at approximately 1.659%. !-- wp:paragraph -->

Mixed Performance in Asia-Pacific Markets

Elsewhere in the Asia-Pacific region, Australia’s ASX/S&P 200 closed flat at 8,981.4. Hong Kong’s Hang Seng Index declined 0.22%, while the Hang Seng Tech Index dropped 0.66%. Markets in China and South Korea were closed for holidays. !-- wp:paragraph -->

US Markets Close Higher Amid Government Shutdown

In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph --> Sanae Takaichi was elected leader of Japan’s ruling Liberal Democratic Party (LDP) on Saturday, becoming the party’s first female leader. Her victory positions her as the likely next prime minister, marking a significant political milestone for Japan. !-- wp:paragraph --> Takaichi is known for her conservative stance and is expected to pursue a “high-pressure economy” strategy, emphasizing expanded investment and demand through public-private partnerships. !-- wp:paragraph -->

Nikkei 225 Surges to Record Highs on Leadership News

Following the LDP leadership announcement, Japan’s Nikkei 225 index soared 4.75% to close at an unprecedented 47,944.76 on Monday. The Topix index also hit an all-time high, rising 3.1% to 3,226.06. !-- wp:paragraph --> The rally was broadly supported by gains in real estate, technology, and consumer cyclical stocks. Notable performers included Yaskawa Electric Corp, which jumped over 20%, Japan Steel Works up 14%, and heavy industry giants Mitsubishi Heavy Industries and Kawasaki Heavy Industries, which rose 13% and 12%, respectively. !-- wp:paragraph -->

Monetary Policy Expectations Under Takaichi Administration

Market analysts expect Takaichi to advocate continued accommodative monetary policy from the Bank of Japan (BOJ), albeit with openness to a modest 25-basis-point rate hike by January 2026. Crédit Agricole CIB noted that the new administration is likely to overhaul economic policy to stimulate investment and demand through stronger public-private cooperation. !-- wp:paragraph -->

“A Takaichi administration, recognising that the current economy is still weak, is expected to completely shift policy direction to a new approach (complete overhaul) that seeks to expand investment and demand through public-private partnerships,” Crédit Agricole CIB stated.

Yen Weakens Past 150 Against US Dollar, Raising Intervention Concerns

The Japanese yen depreciated sharply by over 1.81%, breaching the psychological 150 level against the US dollar. This marks the first time since August that the yen has weakened to this extent, triggering concerns from Finance Minister Katsunobu Kato about potential market instability. !-- wp:paragraph --> Historically, the yen’s fall beyond 151 in October 2022 led to intervention by Japan’s Ministry of Finance. Deutsche Bank analysts suggest near-term declines toward 150 are likely but do not expect significant weakness beyond this threshold. !-- wp:paragraph -->

“A weak yen has been contributing to domestic concerns from overtourism to property price, so further weakness from already depressed levels could be unwelcome even for the government.”

Deutsche Bank analysts

Japanese Government Bond Yields Climb

The yield on Japan’s 30-year government bond rose by over 10 basis points to 3.263%, while the 20-year bond yield increased by more than six basis points to 2.674%. The 10-year benchmark yield remained relatively stable at approximately 1.659%. !-- wp:paragraph -->

Mixed Performance in Asia-Pacific Markets

Elsewhere in the Asia-Pacific region, Australia’s ASX/S&P 200 closed flat at 8,981.4. Hong Kong’s Hang Seng Index declined 0.22%, while the Hang Seng Tech Index dropped 0.66%. Markets in China and South Korea were closed for holidays. !-- wp:paragraph -->

US Markets Close Higher Amid Government Shutdown

In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

!-- wp:paragraph -->

Sanae Takaichi’s Historic LDP Victory Sets Stage for Prime Ministership

Sanae Takaichi was elected leader of Japan’s ruling Liberal Democratic Party (LDP) on Saturday, becoming the party’s first female leader. Her victory positions her as the likely next prime minister, marking a significant political milestone for Japan. !-- wp:paragraph --> Takaichi is known for her conservative stance and is expected to pursue a “high-pressure economy” strategy, emphasizing expanded investment and demand through public-private partnerships. !-- wp:paragraph -->

Nikkei 225 Surges to Record Highs on Leadership News

Following the LDP leadership announcement, Japan’s Nikkei 225 index soared 4.75% to close at an unprecedented 47,944.76 on Monday. The Topix index also hit an all-time high, rising 3.1% to 3,226.06. !-- wp:paragraph --> The rally was broadly supported by gains in real estate, technology, and consumer cyclical stocks. Notable performers included Yaskawa Electric Corp, which jumped over 20%, Japan Steel Works up 14%, and heavy industry giants Mitsubishi Heavy Industries and Kawasaki Heavy Industries, which rose 13% and 12%, respectively. !-- wp:paragraph -->

Monetary Policy Expectations Under Takaichi Administration

Market analysts expect Takaichi to advocate continued accommodative monetary policy from the Bank of Japan (BOJ), albeit with openness to a modest 25-basis-point rate hike by January 2026. Crédit Agricole CIB noted that the new administration is likely to overhaul economic policy to stimulate investment and demand through stronger public-private cooperation. !-- wp:paragraph -->

“A Takaichi administration, recognising that the current economy is still weak, is expected to completely shift policy direction to a new approach (complete overhaul) that seeks to expand investment and demand through public-private partnerships,” Crédit Agricole CIB stated.

Yen Weakens Past 150 Against US Dollar, Raising Intervention Concerns

The Japanese yen depreciated sharply by over 1.81%, breaching the psychological 150 level against the US dollar. This marks the first time since August that the yen has weakened to this extent, triggering concerns from Finance Minister Katsunobu Kato about potential market instability. !-- wp:paragraph --> Historically, the yen’s fall beyond 151 in October 2022 led to intervention by Japan’s Ministry of Finance. Deutsche Bank analysts suggest near-term declines toward 150 are likely but do not expect significant weakness beyond this threshold. !-- wp:paragraph -->

“A weak yen has been contributing to domestic concerns from overtourism to property price, so further weakness from already depressed levels could be unwelcome even for the government.”

Deutsche Bank analysts

Japanese Government Bond Yields Climb

The yield on Japan’s 30-year government bond rose by over 10 basis points to 3.263%, while the 20-year bond yield increased by more than six basis points to 2.674%. The 10-year benchmark yield remained relatively stable at approximately 1.659%. !-- wp:paragraph -->

Mixed Performance in Asia-Pacific Markets

Elsewhere in the Asia-Pacific region, Australia’s ASX/S&P 200 closed flat at 8,981.4. Hong Kong’s Hang Seng Index declined 0.22%, while the Hang Seng Tech Index dropped 0.66%. Markets in China and South Korea were closed for holidays. !-- wp:paragraph -->

US Markets Close Higher Amid Government Shutdown

In the U.S., major stock averages closed higher on Friday despite the ongoing government shutdown. The S&P 500 edged up 0.01% to 6,715.79, the Dow Jones Industrial Average gained 0.51% to 46,758.28, and the Russell 2000 increased by 0.72% to 2,476.18. The Nasdaq Composite fell 0.28%, closing at 22,780.51. !-- wp:paragraph -->

FinOracleAI — Market View

Sanae Takaichi’s election as LDP leader has catalyzed a bullish market reaction in Japan, with the Nikkei and Topix indexes reaching record highs. Her conservative economic stance and commitment to a “high-pressure economy” suggest continued fiscal stimulus and accommodative monetary policy, supporting growth sectors such as real estate and technology. !-- wp:paragraph -->

• Opportunities: Increased public-private investment initiatives, potential BOJ policy flexibility, and sectoral gains in technology and heavy industry.
• Risks: Yen depreciation beyond 150 could prompt government intervention, inflationary pressures from monetary easing, and geopolitical uncertainties affecting market stability.

Impact: Positive. The market is responding favorably to Takaichi’s leadership and anticipated economic policies, though currency volatility remains a key watchpoint.

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