Japan stocks surge on historic appointment of Sanae Takaichi as first female PM

Takaichi Sanae broke political history on Tuesday after winning Japan’s parliamentary vote to become the nation’s first female Prime Minister, a decision that instantly lifted Asian and global markets, according to NHK.

Takaichi-san secured 237 votes out of 465 seats in the Lower House, a clean win that removed the need for any runoff.

The victory followed a coalition agreement between the Liberal Democratic Party (LDP) and the Japan Innovation Party (JIP), finalized over the weekend. Under the deal, Takaichi will support several JIP-backed policies, including cutting the number of parliamentary seats, introducing free high school education, and enforcing a two-year suspension on the food consumption tax, according to a report from Reuters.

Asian markets react to Takaichi’s leadership win

The reaction on Tuesday morning was immediate. Japan’s Nikkei 225 index jumped 1.5% to reach a new all-time high, while the Topix index added 0.73%, both recording fresh records after Monday’s historic close.

Market optimism spread quickly through the Asia-Pacific region, where traders followed the upward cues from Wall Street overnight.

In Hong Kong, the Hang Seng Index climbed by 1.17%, and the Hang Seng Tech Index advanced by 1.84%. Mainland China’s CSI 300 also surged by 0.3%, extending gains from the previous session. The U.S. tech rally, led by Apple’s stock surge, helped set the tone for the region’s trading day.

In South Korea, markets stayed on an upward streak after U.S. Treasury Secretary Scott Bessent told CNBC that Washington was “about to finish up” trade talks with Seoul. “The devil’s in the details, but we are ironing out the details,” Scott said during his interview.

The comment lifted confidence across South Korean equities, with the Kospi index up roughly 61% year-to-date. Hyundai Motor shares climbed 6.45%, Kia Corp gained 4.28%, and Samsung Electronics added 1.73% by the end of trading.

BOJ stance, global commodities, and U.S. earnings in focus

A known conservative, Takaichi has often been described as a follower of Abenomics, the late Shinzo Abe’s signature economic model focused on easy money policies, fiscal expansion, and structural reforms.

During the 2024 LDP leadership race, Takaichi-san criticized the Bank of Japan’s (BOJ) plan to raise interest rates. Meanwhile, BOJ Governor Kazuo Ueda maintained that monetary policy would continue to be decided “without any preconceptions.”

The yen got a slight boost, but it was mostly after BOJ board member Hajime Takata, who voted against keeping rates steady in September, reiterated his support for resuming hikes. The US dollar strengthened 0.08% to 150.710 yen, while the euro slipped 0.06% to $1.164.

On the commodities front, spot gold dipped by 0.3% to $4,340.99 per ounce by 04:56 GMT, after touching a record $4,381.21 the day before. U.S. gold futures stayed flat at $4,357.80, while silver fell 1.2% to $51.83, platinum eased by 0.7% to $1,627.53, and palladium ticked up by 0.1% to $1,497.62.

In the United States, futures for the Dow Jones Industrial Average added 33 points, less than 0.1%, while the S&P 500 and Nasdaq 100 futures stayed slightly positive. Investors were preparing for a heavy week of corporate earnings, with Netflix and Coca-Cola set to release results on Tuesday, followed by Tesla on Wednesday.

Analysts at Bank of America have said that around 75% of S&P 500 firms reporting so far had beaten earnings forecasts. The AI-driven momentum remained strong, with the “Magnificent 7” tech giants — including Apple, Microsoft, and others — expected to post 14.9% year-over-year profit growth, compared to 6.7% for the rest of the index, according to FactSet.

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