Overview

• The LDP pushed back the extraordinary Diet session to October 20 or later after talks with junior partner Komeito ended without a deal, delaying the vote to select a new prime minister.
• Investors continue to price a 'Takaichi trade,' with the Nikkei recently at record highs, long-dated JGB yields higher, and the yen touching about ¥152 per dollar as hopes of a near-term BOJ rate hike fade.
• Analysts warn that expected fiscal expansion could strain Japan’s already heavy debt load, even as Takaichi signals closer coordination with the Bank of Japan and support for keeping the policy rate near 0.5%.
• Sources say Takaichi may forgo a visit to the Yasukuni Shrine during its autumn festival to avoid diplomatic flare-ups, as she balances conservative credentials with regional sensitivities.
• Takaichi has received high-profile international attention, including public congratulations from U.S. President Donald Trump, yet immediate policy rollout hinges on resolving the coalition standoff and clearing the confirmation vote.