The Nikkei 225 index jumped 3.9% to close at 47,566.84 points, after surpassing the 46,000 mark for the first time earlier in the day. Meanwhile, the Topix index gained 2.3%. Analysts said the market reacted positively to Takaichi’s expansionary fiscal stance and pro-loose monetary policy, a sharp contrast to former Prime Minister Shigeru Ishiba, who favored stricter fiscal discipline.

Hitoshi Asaoka, chief strategist at Asset Management One, noted that the Nikkei had already been on track to reach 48,000 points by year-end, but Takaichi’s victory accelerated that rally sooner than expected. However, he cautioned that if the new government fails to deliver on additional spending measures, profit-taking pressure could emerge before the end of the year.

Defense contractor Mitsubishi Heavy Industries soared more than 13%, driven by expectations that Takaichi’s administration would boost defense spending.

In contrast, banking shares declined, with the Topix Banks Index dropping 2%, as investors speculated that the Bank of Japan (BOJ) might delay interest rate hikes—potentially narrowing banks’ lending margins.

Japanese media reported that Takaichi plans to appoint Minoru Kihara, former defense minister, as chief cabinet secretary, and may bring Toshimitsu Motegi back as foreign minister. The post of finance minister, closely watched by financial markets, has yet to be officially announced.

Following her victory, Takaichi stated that the government and the central bank must work closely together to achieve domestically driven inflation, supported by sustainable wage growth and corporate profitability.

https://www.thairath.co.th/news/foreign/2887236