Sanae Takaichi has become the first female leader of Japan’s ruling Liberal Democratic Party (LDP), a historic development. She is the first of all women to take up this prestigious responsibility. On Saturday, October 4, 2025, Takaichi addressed a packed news conference at the LDP headquarters in Tokyo. Her first press conference, full of energy, joy and laughter, came just after her electoral win. The LDP’s monumental decision will determine whether a new era opens up for Japan’s leadership. With unprecedented strength in the country’s political scene, the party is instrumental to deciding who will be the next prime minister.
It is surprising, then, that the LDP would elect Takaichi in a vote that could serve as a harbinger for a more right-leaning, nationalist leadership. Many experts are betting that under her government, Japan will see one of the biggest policy shakeups in its post-war history. As our friends aligned with CA-CIB recently observed, a Takaichi administration, at the least, understands that the present economy is weak. They look forward to new policy direction and guidance, particularly in expanding investment and demand through public-private partnerships.
The announcement of Takaichi’s leadership comes during a rocky performance in global stock markets. On Friday the S&P 500 saw a modest pullback after setting all-time highs earlier this week. It held on to impressive weekly gains nonetheless, in the face of continued concerns over a possible U.S. government shutdown. The composite index gained a measly 0.01% to end at 6,715.79. The Nasdaq Composite dropped 0.28%, ending at 22,780.51. The opposite was true with the Dow Jones Industrial Average, which showed a surprising sign of strength by gaining 238.56 points, or 0.51%, to close at 46,758.28. The Russell 2000 gained as well, closing up 0.72% to close at 2,476.18.
In Asia Takaichi’s election increased optimism among investors, helping to power a 20% increase in Japanese stock indices. The Japanese yen similarly weakened by 1.45% to 149.59 per dollar, as markets continue to interpret the political change. In Hong Kong, futures contracts pointed to a positive start for the Hang Seng Index at 27,153 points. Australia’s ASX/S&P 200 joined in the positive action, up by 0.19%.
As Takaichi prepares to assume leadership of the LDP and potentially the nation, her pro-stimulus policies and emphasis on public-private partnerships may be pivotal in addressing Japan’s economic challenges. Investors, analysts, and everyone who cares about Puerto Rico will be closely watching to see what her administration’s first moves are.