Nikkei Soars: Takaichi's Election Boosts Japanese Markets

Japan's Nikkei index skyrocketed past the 47,000 mark on Monday, a historic high after fiscal dove Sanae Takaichi was elected leader of the ruling party, positioning her as Japan's next prime minister. This saw the Nikkei 225 Index shooting up by 3.9% to 47,566.84, breaking past the 46,000 barrier for the first time.

The two-year Japanese government bond yields dipped by 4 basis points to 0.9% amid expectations of delayed rate hikes by the Bank of Japan. As the yen fell over 1% against both the dollar and euro, Takaichi emerged with the most pro-spending agenda among candidates to succeed hawkish Prime Minister Shigeru Ishiba.

Market strategist Hitoshi Asaoka noted the Nikkei's potential to reach 48,000 by year's end, bolstered by Takaichi's election, though the LDP's minority status could hinder policy implementation. Investors await her cabinet selections, potentially including ex-defense minister Minoru Kihara and former foreign minister Toshimitsu Motegi.

(With inputs from agencies.)