Sanae Takaichi, newly-elected leader of the Liberal Democratic Party (LDP), speaks during a news conference at the party’s headquarters in Tokyo, Japan, on Saturday, Oct. 4, 2025. Japan’s ruling party elected right-leaning Takaichi as its first female leader today, in a vote that is also likely to determine who will become Japan’s next prime minister. Photographer: Toru Hanai/Bloomberg via Getty Images
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Japan’s Nikkei 225 index jumped over 4% to hit a record high Monday after the country’s ruling Liberal Democratic Party elected staunch conservative Sanae Takaichi as its new leader Saturday, positioning her to become the country’s first female prime minister.
The early surge was led by gains in real estate, technology and consumer cyclical stocks. Yaskawa Electric Corp jumped over 20%, while Japan Steel Works was up 14%. Mitsubishi Heavy Industries and Kawasaki Heavy Industries added 13% and 12% respectively.
Given the government’s economic policy of a “high-pressure economy,” Takaichi is likely to ask the Bank of Japan to maintain its accommodative monetary policy, Crédit Agricole CIB wrote in a note over the weekend following the results, adding that she would be open to a 25-basis-point rate hike by the BOJ by January 2026.
“A Takaichi administration, recognising that the current economy is still weak, is expected to completely shift policy direction to a new approach (complete overhaul) that seeks to expand investment and demand through public-private partnerships,” CA-CIB’s note said.
Similarly, the Topix rose as much as 3% to hit an all-time high.
The Japanese yen weakened 1.45% to trade at 149.59 against the dollar. Japan’s 30-year bond yield rose over 10 basis points to 3.263%, while the yield on the 20-year debt added over six basis points to 2.674%.
The benchmark 10-year bond yield is little changed at around 1.659%.
Australia’s ASX/S&P 200 rose 0.19%.
Hong Kong’s Hang Seng Index fell 0.22%, while the Hang Seng Tech Index declined 0.66%.
Chinese and South Korean markets were closed for holidays.
Last Friday in the U.S., the three major averages closed higher. The S&P 500 retreated from a record on Friday but held on to solid weekly gains despite a U.S. government shutdown dragging on for a third day, ticking up just 0.01% at 6,715.79.
The Nasdaq Composite declined 0.28% to settle at 22,780.51. The Dow Jones Industrial Average outperformed, trading higher by 238.56 points, or 0.51%, to finish at 46,758.28. The Russell 2000 also popped 0.72% to close at 2,476.18.
— CNBC’s Pia Singh and Sean Conlon contributed to this report.
