Japan's Nikkei stock index jumps nearly 5% after its ruling party picked Takaichi to lead

Market Reaction - Japan's Nikkei stock index surged nearly 5% following the election of ultra-conservative Sanae Takaichi as the leader of the ruling Liberal Democratic Party, likely making her the first woman prime minister [1][2] - The Nikkei 225 index rose 4.7% to 47,924.52, while the yen weakened against the U.S. dollar, reflecting expectations of increased spending under Takaichi's leadership [6] Political Context - Takaichi, an ally of the late Prime Minister Shinzo Abe, is expected to continue his market-friendly policies, which have historically supported investor confidence [2][4] - The Liberal Democratic Party holds the most seats in the lower house, positioning Takaichi to become prime minister despite not having a majority [3] Investor Sentiment - Investors, particularly non-Japanese ones, reacted positively to Takaichi's election, with significant stock movements led by foreign investors [4][5] - Automakers' shares, including Toyota and Honda, saw notable increases, attributed to unconfirmed reports of potential tariff reductions by the U.S. government [5] Economic Challenges - Takaichi faces significant challenges, including enhancing Japan's economic competitiveness, addressing the impacts of an aging population, and managing a substantial public debt burden [4] Oil Market Update - U.S. benchmark crude oil prices increased by about $1 per barrel, with Brent crude also rising, following an OPEC+ decision to slightly boost oil production [11][12]