Sanae Takaichi, a protégé of former prime minister Shinzo Abe and a supporter of his stock market-friendly Abenomics, won the Liberal Democratic Party’s ( LDP ) first-round presidential election on Friday, with support from stock market investors and currency traders.
In that first round, Takaichi received 181 votes, followed by Shigeru Ishiba with 154, Shinjiro Koizumi ( backed by ex-premier Yoshihide Suga ) with 136 and six other candidates who lagged far behind. Financial experts, who had ranked Takaichi as their top selection in an Asahi paper surveys, celebrated in progress.
The Nikkei 225 rose 1, 959.30 items, or 5.2 %, in two weeks to crest at 39, 829.56 on Friday afternoon after the first-round voting. But buyer hopes were dashed when Ishiba won the run-off, 215 to 194, to be party chief and almost surely Japan’s future prime minister.
The Nikkei 225 Futures index dropped about 6 % in the after-hours session on Friday. The Nikkei 225 itself lost 1, 910.01 points, or 4.8 %, on Monday ( September 30 ), falling back to 37, 919.55.
Takaichi publicly declared her antagonism to higher interest rates, endearing herself to stock market investors. She favors monetary easing and stronger fiscal stimulus, much like her later coach Abe.
She said, “Economic development comes first and foremost, and that’s what people are shocked by the price of tomatoes and almost everything else these time.”
Ishiba, on the other hand, supports Bank of Japan Governor Kazuo Ueda’s scheme of gradually raising costs to maintain the yen, which had been dropping like a stone, and tame prices.
Ishiba added that he would think about raising corporate and financial money fees, which may improve the taxation system in Japan and lessen its enormous government deficit.
Soon after Ishiba’s triumph was confirmed, the yen jumped from 146.2 to 143.3 to the penny. It therefore continued to rise, reaching 141.65 on Monday.
The share prices of Chinese manufacturers, on the other hand, were pounded. Toyota, which was up 2.0 % on Friday, dropped 7.6 % on Monday. With the notable exception of bankers, which may do nicely as interest rates rise, nearly every industry was over.
The yield on 10-year Japanese government bonds rose 0.045ppts to 0.85 %. The BOJ’s policy rate is 0.25 %.
Financial business owners may initially be disappointed, but Ishiba is supported by Chinese companies. The president of the Japan Chamber of Commerce and Industry described Ishiba as” a competent policymaker who has addressed numerous obstacles head-on,” as reported by Nippon Television.
The Chamber of Commerce, like Ishiba, is dedicated to the advancement of regional economy and the support of small and medium-sized businesses.
The chairman of Keidanren ( Japan Business Federation ), said that Ishiba is” the right leader to drive forward transformation” in the current challenging environment. The tone of Japan Inc. is typically referred to as Kaidanren.
Furthermore, an Asahi poll showed Ishiba to be the most popular candidate among the general public, supported by 26 % of respondents compared with Takaichi’s 11 %.
In the end, the LDP opted for practice and expediency over a rehashing of financial plans that were developed over a decade ago for a unique financial period. At a public vote that Ishiba intends to call on October 27, the LDP’s option may be tested.
Stock market experts chose Takaichi over the LDP debate’s first-round results, failing to consider where former prime minister Suga did vote Koizumi’s support in the two-candidate run-off.
Looking for short-term profits, they fell for Takaichi’s go-for-growth repeat of Abenomics. However, both Ishiba and the general public prefer Ishiba. As the LDP’s trust recovers among voters, the opposition Constitutional Democratic Party is in a hard place.
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