Japan’s benchmark Nikkei 225 index surged more than 4% on Monday, hitting record highs after the ruling Liberal Democratic Party (LDP) elected Sanae Takaichi, an ultra-conservative and close ally of late Prime Minister Shinzo Abe, as its new leader, paving the way for her to become Japan’s first female prime minister.The Nikkei jumped 3.9% to close at 47,566.84, after briefly crossing the 46,000 mark for the first time ever. The broader Topix index also advanced 2.3%, buoyed by investor optimism that Takaichi will continue Abe’s pro-market and stimulus-heavy economic policies.In contrast, Hong Kong’s Hang Seng index edged 0.1% lower to 27,119.36, while Australia’s S&P/ASX 200 was largely unchanged at 8,984.70.Markets in mainland China, Taiwan, and South Korea remained shut for holidays, AP reported.The yen weakened against the US dollar, falling to 149.79 per dollar from 149.33 a day earlier, amid expectations that Takaichi could introduce higher public spending measures, potentially adding to inflationary pressures. The euro dipped slightly to $1.1720.Takaichi, 64, is seen as a protégé of Shinzo Abe and has long admired former British Prime Minister Margaret Thatcher. Known for her hawkish views, she has vowed to strengthen Japan’s defence, boost industrial competitiveness, and implement measures to address demographic challenges such as the country’s ageing population and rising debt burden.“The Nikkei was on course to reach as high as 48,000 by year-end, but because Takaichi was chosen as the LDP leader, it shot up toward that level already,” Hitoshi Asaoka, the chief strategist at Asset Management One told Reuters.“The market welcomes her spending policy, but whether she can achieve that goal is not certain, as the LDP is still a minority party. The Nikkei may retreat once before year-end.”An unconfirmed report suggesting that the US President Donald Trump may ease tariffs on auto parts and manufacturing materials also helped lift Japanese automakers’ shares. Toyota Motor Corp. jumped 4.9%, while Honda Motor Co. gained 4.7%.Meanwhile, Wall Street ended last week mostly higher, with the S&P 500 edging up 0.1% to 6,715.79, its seventh winning week in nine. The Dow Jones Industrial Average gained 0.5% to 46,758.28, both setting new records, while the Nasdaq Composite slipped 0.3% to 22,780.51.Oil prices also strengthened in early Monday trade after OPEC+ announced a smaller-than-expected increase in output. Brent crude rose 1% to $65.16 per barrel, while US West Texas Intermediate (WTI) climbed 1% to $61.46. The oil alliance, which includes Russia and other non-OPEC producers, agreed to add just 137,000 barrels per day in November, matching October’s modest increase, to avoid oversupply and maintain price stability.
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