(BFM Stock Exchange) – The Nikkei 225, the main index of the Tokyo Stock Exchange took almost 5% while the yen fell by more than 1% after Sanae Takaichi was elected to the head of LDP, the most important Japanese party. Which will allow him to become Prime Minister of Japan. This critical immigration nationalist is perceived as practicing an expansionist budgetary policy while pleading against rate increases.

For the first time in the history of Japan, a woman is preparing to take the head of the government.

The experienced Sanae Takaichi won internal elections on the PLD (Liberal-Democrat party), the Japanese conservative party in power in power since 1955 on Saturday. The political leader has become a head of the party, which, except enormous and improbable reversal, will allow him to become Prime Minister of Japan.

His victory remains a surprise. Paris surveys and organizations were more tabling on Shinjiro Koizumi (44), a reformer and son of former Prime Minister Junichiro Koizumi.

The recent rise in power of a nationalist party, called Sanseito, having as a slogan “The Japanese first” was able to play in its favor. Sanae Takaichi is known to keep a speech advocating more severity with regard to immigration (she would have recounted an anecdote on a tourist harassing a suede in the pretty city of Nara) as well as for her intransigence towards China. It also calls for strengthening defense and national security.

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A skeptical Heavy Metal drummer on immigration

In love with motorcycles and former drummer in a group of Heavy Metal at university, Sanae Takaichi cited many times Margaret Thatcher as a source of inspiration. We will not be surprised that several media, such as the BBC, nicknamed it, the “Iron Lady” (“Iron Lady) of Japan.

The scholarship was greatly propelled by its victory, while the yen suffers on Monday. The Nikkei 225, the main index in Place de Tokyo, closed on an increase of 4.75%. The yen, he unscrews. Around 11:15 am, the Japanese motto lost 1.3% against the euro.

Takaichi is perceived as favorable to budgetary recovery and hostile to interest rate increases, in a way in the heritage of Shinzo Abe, the former Japanese Prime Minister and his “Abenomics” who had tried to relaunch the Japanese economy via expansionist measures.

“In short, she defends an aggressive budget revival, a position that our economist Ken Koyama describes as supporting a ‘high pressure economy’,” explains Deutsche Bank.

What about monetary policy?

“In the short term, the landscape is characterized by increasing actions, a potentially lower yen and prudent bond markets, investors adapting to the prospect of an ‘Abenomics 2.0’ under the first Prime Minister of Japan”, considers Shrikant Kale, Jefferies, quoted by Reuters.

“The markets immediately began to sketch its political profile: budgetary expansion and monetary hesitation. She is not a budget hawk. She is rather a reflationist trapped in a world already halfway from stagflation” explains Stephen Innes.

“His mantra-growth before budgetary purity-announces more recovery measures, more debt emissions and less appetite for normalization from the Bank of Japan. The yen will interpret this as an invitation to drop, perhaps up to 150 ($ 1 for 150 yen, editor’s note), while the Nikkei hosts the new one as a dose of caffeine, with an increase of almost 4% on the session, Traders having taken into account the two favorable factors that are the weakness of the currency and the increase in expenditure “, develops the market expert.

The political leader had been critical, in 2024, to the Bank of Japan for having increased its guiding rates, qualifying this decision as “stupid”. She has since put water in her wine.

“Ms. Takaichi recognized the need to give priority to the measures aimed at combating inflation and avoided reiterating the comments of 2024 according to which it would be reckless on the part of the BOJ to raise its rates. But its position on the fight against inflation seems always different from traditional political prescriptions”, slices Deutsche Bank.

Previously to the purchase on the yen, the German bank went to “neutral” on the Japanese currency.

Thatcher or Truss

“Sanae Takaichi’s surprise victory reintroduces too many uncertainties around Japan’s political priorities and the calendar of the rate of rates of the Bank of Japan,” explains Deutsche Bank.

“We note that it argued that inflation in Japan is more linked to the cost increase than at demand, focused on budget reduction measures, rather than monetary policy to combat prices on prices and has not excluded reductions in consumer tax, stressed that the government and the Bank of Japan should work in close collaboration and proposed a plan to expand coalition.” develops the German bank.

Sanae Takaichi, however, has a number of challenges to be met, such as uniting a divided and loss of speed party, or supporting growth, controlling inflation and developing artificial intelligence within a parliament where the LDP has lost the absolute majority in both chambers.

“She wants to become the national version of her idol, Margaret Thatcher. Some fear that she will become the Liz Truss of the country,” wins in a Bloomberg editorial.

At the end of 2022, British Prime Minister Liz Truss had only held 44 days at the head of the United Kingdom due to economic choices deemed catastrophic by the market.