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2h ago

Takaichi Unveils Aso-Aligned LDP Leadership, Opens Coalition Talks as She Nears Premiership

Investors are pricing a shift toward fiscal expansion, sending Japanese stocks to records and long‑end bond yields higher.

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Deers at Nara Park in Nara, Japan, October 6, 2025. REUTERS/Joseph Campbell
Motoko Shimada, childhood friend and primary school classmate of Sanae Takaichi, the newly elected president leader of Japan's ruling Liberal Democratic Party (LDP), speaks during an interview with Reuters at Takaichi’s constituency office in Yamatokoriyama, Nara Prefecture, Japan, October 6, 2025. REUTERS/Joseph Campbell
A graph on a screen displays Japan's Nikkei share average outside a brokerage, as the Tokyo Stock Exchange started trading after Japan's governing Liberal Democratic Party elected a new leader on October 4, outside a brokerage in Tokyo, Japan, October 6, 2025. REUTERS/Androniki Christodoulou

Overview

  • Sanae Takaichi formalized an executive lineup led by the Aso faction, naming Shunichi Suzuki as LDP secretary‑general and Taro Aso as party vice president alongside Haruko Arimura, Takayuki Kobayashi and Keiji Furuya in key posts.
  • The LDP held talks with Democratic Party for the People leader Yuichiro Tamaki and DPFP secretary‑general Kazuya Shinba on policy cooperation, with overlap on tax relief and tougher rules for foreign workers, though the DPFP remains cautious about joining a coalition.
  • Party sources say the LDP is weighing offering the DPFP a ministerial post to secure a working majority after recent elections left the LDP‑Komeito bloc in the minority in both chambers.
  • Komeito chief Tetsuo Saito conveyed significant concerns about Takaichi’s stance and warned the coalition could not continue without reassurance, with senior LDP‑Komeito officials set to meet Tuesday.
  • Markets extended a "Takaichi trade" as the Nikkei hit fresh highs, the yen weakened past ¥150 per dollar and super‑long JGB yields climbed, while Goldman Sachs warned rising long‑end Japanese yields could lift UK and US borrowing costs.