On October 6th, in the wake of the election of Sanae Takaichi as the new leader of the Liberal Democratic Party in Japan, the Tokyo Stock Market saw a surge with the Nikkei index closing up by 4.75%, reaching a record high of 47,944.76 points. US President Trump praised Takaichi’s election on the social media platform “Truth Social”.
Local time on Monday, the Tokyo Stock Market’s Nikkei index rose significantly, surging over 2300 points at one point and breaking the 48,000-point mark for the first time. It closed at 47,944.76 points, marking a 4.75% increase and once again setting a new record high from three days ago.
The TOPIX index rose by 96.89 points, closing at 3226.06 points, up by 3.10%, also reaching a historic high. The total trading volume for the day was 30.3059 billion shares. The strong buying seen throughout the day in the TOPIX index reflects investors’ strong expectations for economic recovery.
According to Kyodo News, Takaichi’s election as the leader of the Liberal Democratic Party is seen as a direct response of the market to her expected implementation of active fiscal policies.
In addition, the yield on newly issued 10-year government bonds, which serves as a long-term interest rate benchmark in the bond market, has risen to its highest level in about 17 years.
On the 6th, leading gold dealer Tanaka Precious Metals set the selling price of gold at 21,039 Japanese yen per gram, approximately 996 Chinese yuan. As an indicator of domestic gold retail prices in Japan, this surpasses the 21,000 yen mark for the first time, reaching a historic high.
Takaichi’s victory in the second round of the Liberal Democratic Party presidential election last weekend, where she garnered 185 votes defeating Seiko Noda, marked her as the first female president of the party. This 64-year-old conservative stalwart’s triumph not only reshapes the political landscape of Japan but also indicates her high likelihood of becoming the 104th Prime Minister of Japan in the extraordinary parliamentary elections on October 15 – making her the first female prime minister.
Born on March 7, 1961, in Nara City, Nara Prefecture, Takaichi, whose parents were both working-class, graduated from the Business Administration Department of Kobe University. She furthered her studies at the Matsushita Seikei Juku founded by Konosuke Matsushita in 1984, and then spent two years in the US as an assistant to US Congressman Pat Schroeder before returning to Japan to work as a television broadcaster and an economics professor at Kinki University.
Since her first election as a member of the Lower House of the Diet in 1993, Takaichi has held various ministerial positions in the cabinets of Shinzo Abe and Fumio Kishida. Described as having a “firm conservative political reputation”, Takaichi is a close ally of the late former Prime Minister Shinzo Abe.
Takaichi’s election has quickly garnered international attention. US President Trump took to the social media platform “Truth Social” to commend the selection of Japan’s first female prime minister, lauding her as a highly respected individual with great wisdom and strength. Although not explicitly naming Takaichi, the statement is seen as a confirmation of her.
Known for her hawkish stance as a confidant of Shinzo Abe, Takaichi has been dubbed the “Japanese Trump” by Chinese netizens. She firmly opposes Chinese expansion, openly stating that “if something happens to Taiwan, it is a matter for Japan” and advocating for the strengthening of Japan’s military presence in the East China Sea and Taiwan Strait. She has called for legislation to restrict Chinese investments and technology acquisitions, pushing for a decoupling of Japanese and Chinese technology.
In an article published on October 1st, Takaichi stated that if elected, she would engage in a “solid and candid dialogue” with Chinese leaders on the Taiwan issue, referring to Taiwan as Japan’s “precious friend” and expressing a desire to deepen “unofficial relations” with Taiwan.
On the front of the Japan-US alliance, Takaichi advocates for amending the pacifist constitution, transforming the Self-Defense Forces into a “National Defense Force,” increasing defense spending to 2% of GDP, and developing long-range strike weapons. She emphasizes increasing the frequency of joint military exercises between Japan and the US to shift the alliance from passive defense to active deterrence, easing the burden on the US in the Indo-Pacific region.
According to The Wall Street Journal, Takaichi has pledged to boost the economy through increased borrowing and spending, and may renegotiate the Japan-US trade agreement to address voter concerns stemming from inflation and immigration issues. This aligns with the global trend of conservative rise, from the emergence of populism in Europe and America to the shift towards the right in Asia.
Takaichi’s ascent not only signifies a shift in internal power dynamics in Japan but also promises to reshape the geopolitical landscape of the Asia-Pacific region. While investors are optimistic, the international community is closely monitoring how this “iron lady” will balance economic recovery and security challenges.