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Nikkei Surges, Yen Sinks After Takaichi Wins LDP Leadership

Investors price a return to Abenomics-style stimulus ahead of her expected mid-October confirmation as prime minister.

Overview

  • Takaichi defeated Shinjiro Koizumi 185–156 in the Oct. 4 runoff to lead the ruling Liberal Democratic Party, positioning her to be confirmed by the Diet later this month.
  • The Nikkei 225 jumped about 4.5–4.75% to close near 47,945 after touching 48,150, while other major Asian markets were mixed.
  • The yen weakened to roughly ¥149.6–¥150.1 per dollar and hit a record low near ¥176.22 against the euro, reflecting bets on looser policy.
  • Longer-dated JGB yields spiked, with the 30-year briefly at 3.29% and the 40-year rising to about 3.505%, and a 30-year auction on Tuesday is being closely watched.
  • Markets are factoring in expansive fiscal plans and continued monetary easing, with reported odds of a BoJ rate hike by December falling and key cabinet posts—especially the finance minister—still unannounced as media float Minoru Kihara and Toshimitsu Motegi for senior roles.