Japan’s markets delivered a mixed reaction to Sanae Takaichi’s victory in the Liberal Democratic Party (LDP) leadership race, which paves the way for her to become the country’s first female prime minister when Parliament votes on 15 October 2025.

The yen weakened sharply, slipping past 150 per United States dollar (USD) for the first time in over two months, while the Nikkei 225 index surged to a record high.

Takaichi, a longtime advocate of monetary and fiscal stimulus, has pledged to maintain Japan’s accommodative economic policies. Investors interpreted her win as a signal that the Bank of Japan (BOJ) will delay further interest rate hikes, reducing the yen’s appeal but bolstering equities. Exporters stand to gain the most, as a weaker yen boosts overseas earnings once converted back into local currency. The result highlights the trade-off Japan faces between currency stability and economic growth.