Japan's Stocks Surge to All-Time Highs After Selection of Business-Friendly Leader

Japanese shares have hit a record high after the nation's ruling LDP appointed Sanae Takaichi as its new chief, paving the way for her to be the country's upcoming leader.

The benchmark Nikkei index gained around four and a half percent on Monday afternoon in the capital, after climbing past 47,000 for the first time.

She, who has served in senior government roles including minister for economic security and internal affairs, is recognized for her advocacy of increased government spending and reduced borrowing costs.

She is additionally a longstanding supporter of former UK leader the Iron Lady and her free market approach to economics.

Investor Response and Economic Effects

Investors applauded the announcement of her win in the LDP leadership race, with shares climbing in real estate, tech and heavy industry firms.

Although Japan's equities gained, the Japanese currency reached a record low against the European currency and dropped by 1.7% against the US dollar.

The day's reaction was mostly a "knee-jerk reaction" to the potential appointment of the leader as prime minister, an economist Jesper Koll told.

Although her economic plans to boost the economy through higher government spending could help companies, they may additional pressure on the currency as Japan's debt rises, noted Mr Koll.

Leadership Transition and Issues

Should approved later this month as the replacement to Shigeru Ishiba, she will be Japan's first female leader.

Guided by late Prime Minister Abe, she has supported his economic vision - known as Abenomics - of high government expenditure and cheap lending.

Should appointed in the role, she will have to navigate a challenging bilateral ties and implement a tariff deal with American leader Donald Trump administration, which was previously agreed by the Ishiba government.

She would also have to contend with a sluggish economy and households facing rising expenses and slow income increases.

With Trump expected to travel to the country soon, Mr Koll stated Takaichi will be eager to discuss a fresh deal with the US president "to get the dollar weaker and to strengthen the Japanese currency up."