Summary
Sanae Takaichi’s victory in the Liberal Democratic Party (LDP) leadership race on October 4, 2025, triggered what markets call the “Takaichi Trade.” Investors anticipate bold fiscal expansion and continued monetary easing as she prepares to become Japan’s next prime minister. Her pro-growth stance sparked a record surge in Japanese equities, rising JGB yields, and a yen depreciation beyond ¥150 per U.S. dollar, signaling expectations of aggressive spending, infrastructure stimulus, and a long-term economic reorientation toward domestic revival and structural reform.
Market Reaction: The “Takaichi Trade”
On October 4, 2025, Sanae Takaichi defeated Shinjiro Koizumi to become the new LDP leader and the expected next Prime Minister of Japan, pending the Diet’s mid-October confirmation vote. Financial markets immediately priced in a new “fiscal reawakening”.
