Japan’s Nikkei Stock Index climbed 4.7% on Monday, reaching a record high of 47,944.76. This surge was mainly fueled by growing investor optimism following the election of Takaichi as a conservative leader of the Liberal Democratic Party (LDP).
Kyodo News reported on the unexpected strength of Kochi’s stocks, noting that other indices also hit record highs along with the Nikkei.
“Almost every sector in the top-tier Prime Market, especially mechanical, electrical, and real estate, has seen significant gains,” Kyoto News added.
The yen fell to a two-month low against the US dollar, marking an all-time low versus the euro. This decline was attributed to a diminished fear of interest rate hikes, with investors anticipating a simpler monetary policy in a high-interest environment.
“The sharp rise today is probably due to her unexpected victory and the joyous atmosphere surrounding Japan’s first female prime minister,” financial strategist Sato commented.
Kochi is known to have studied under the late Shinzo Abe, whose Abenomics policies resonate with voters considering economic progress since he took office.
Kochi is often compared to former British Prime Minister Margaret Thatcher in terms of her economic and immigration policies. She has even been called a “self-proclaimed role model” of current U.S. President Donald Trump, who shared a close friendship with her predecessor, Abe.
Her response to winning was surprisingly upbeat, especially since just days prior, she was an underdog in a leadership race that was expected to favor the less popular Prime Minister Isba Cigar. A recent three-day poll indicated that 68.4% of respondents held “high expectations” for her administration.
However, the same poll revealed that 77.5% of those surveyed opposed Takaichi, particularly in relation to LDP lawmakers associated with a recent scandal affecting the party. This scandal has significantly impacted the LDP, which, despite being Japan’s largest political party, has lost its majority in both legislative houses.
One factor contributing to Kochi’s significant victory was the damage caused by the fundraising scandal to various factions within the extensive LDP. The former prime minister’s backing seems to have propelled Takaichi above her primary challenger, the Minister of Granguri.
Some supporters believe Kochi may help unify the fractured LDP and restore a sense of purpose in Japanese politics. Moreover, 86.5% of respondents in a weekend poll expressed that it would be “desirable” for Japan to have its first female prime minister.
Takaichi’s first alliance appears to be with Komeito, the LDP’s partner, rather than its opponents. This conservative party holds Buddhist values and prides itself on maintaining clean, corruption-free politics.
One notable divergence between Komeito and the LDP is the latter’s move toward a more aggressive military stance. Under Abe, there were efforts to amend Japan’s pacifist postwar constitution. Komeito, on the other hand, is less inclined toward immigration, fearing that Kochi’s assertive policies might escalate tensions with China.
On Tuesday, chief Zait Tetsuo shared his concerns regarding Komeito’s alliance while expressing appreciation for the central Democrats for People (DPFP). It seems Kochi aims to integrate DPFP into the dominant coalition of the LDP and Komeito.
Kochi also built bridges by appointing Motegitoshimitsu, one of her leadership rivals, as Foreign Minister. Motegi previously held this position during Trump’s first term and has been a key player in trade discussions with the U.S. this year.
President Trump is scheduled to visit Japan later this month. He extended warm and somewhat premature congratulations to Takaichi via social media on Monday.
“Japan has chosen its first female prime minister, a respected individual with immense wisdom and strength. This is fantastic news for the wonderful people of Japan. Congratulations!” Trump stated.
