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Japan’s stock market hit a record high on Tuesday as the country elected Sanae Takaichi as its first female prime minister. Ms Takaichi won 237 votes in the 465-seat lower house, securing her position as Japan’s 104th prime minister after a coalition deal between her ruling Liberal Democratic Party (LDP) and the right-wing Japan Innovation Party (Ishin). She was later approved by the upper house and sworn in on Tuesday afternoon. Her victory marks a major breakthrough in a country where men still dominate politics, but it also signals a sharper turn to the right on issues such as immigration and social policy. Economically, investors expect her to double down on stimulus measures – a stance that has fuelled what traders have dubbed the “Takaichi trade.” Ms Takaichi comes from the same hardline LDP faction as the late Shinzo Abe, and is expected to pursue the same mix of high government spending and easy monetary policy that once fuelled his “Abenomics” agenda. The Nikkei 225 index responded by inching close to the never-broken 50,000 mark before lunch on Tuesday after a second straight day of record gains, while the broader Topix index reached its highest level in 34 years. The yen weakened to about ¥151 per US dollar, boosting exporters such as Toyota and Sony. Ms Takaichi replaces Shigeru Ishiba, ending a three-month political vacuum and wrangling since the Liberal Democratic Party's disastrous election loss in July. "Political stability is essential right now," Ms Takaichi said earlier on Monday at the signing of a coalition agreement with Ishin leader and Osaka governor Hirofumi Yoshimura, with the policies agreed to by the pair underscoring Ms Takaichi's hawkish and nationalistic views. “Without stability, we cannot push measures for a strong economy or diplomacy,” she added.
