Takaichi elected LDP Chief, poised to become Japan’s first female prime minister

Sanae Takaichi, has been elected the new leader of Japan's ruling Liberal Democratic Party (LDP), positioning her to become the country's first female Prime Minister.

Takaichi's election follows the resignation of former Prime Minister Shigeru Ishiba, who stepped down after the LDP's ruling coalition lost its majority in both chambers of parliament.

In her remarks on Saturday, Takaichi stressed the need for close collaboration between the government and the Bank of Japan (BoJ) to achieve demand-driven inflation supported by rising wages and corporate profits.

She offered a cautious assessment of the current economy, noting that while Japan "may no longer be in deflation," the economy remains fragile because recent price gains have been largely driven by higher raw material costs, not consumer demand.

"It’s too early to be complacent" about the risk of returning to deflation, she warned, emphasizing that sustainable growth requires robust wage increases to stimulate consumer demand and boost corporate profits.

She also signaled a review of the 2013 joint statement between the government and the BoJ, which centered on defeating deflation.

The Nikkei 225 Index jumped about 4% to around 47,600 on Monday, hitting fresh record highs after a ruling party vote paved the way for fiscal dove and pro-stimulus lawmaker Sanae Takaichi to become Japan’s next prime minister. The Japanese yen depreciated nearly 2% toward 150 per dollar on Monday, touching a two-month low.

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