On the 6th of October, the day was rising.
The Nikkei 225 Index closed up 4.8% at 47,944.76 points; the TSE Index rose 3.1% at 3,226.06 points; both hit record closing highs.
The dollar rose by 2 percent against the yen per day, up from 150.43, a new high since August 1.Japan's 30-year bond yield hit a record high of 3.29%.
According to the shanghai securities news, Sanae Takaichi, who was recently elected as the first female president of Japan's Liberal Democratic Party, supports loose fiscal and monetary policies. It is believed that her coming to power may aggravate concerns about the increase in bond supply, and at the same time lower expectations for the Bank of Japan to raise interest rates this month.
Gao Shi Zao Miao was elected
Liberal Democratic Party's first female president
According to Central TV News, on the afternoon of October 4, local time, the ruling Japanese self-government party held the president's election ballot count. In the second round of the vote, the former Minister for Economic Security and Security, Cao市早苗, received a majority of votes, was elected as the 29th president of the self-government party, and will probably become a new Japanese prime minister.
The election went through two rounds of voting that day. In the first round of voting, each of the 295 Liberal Democratic Party members of parliament had one vote. Party members and "party friends", that is, registered supporters, were proportionately converted into 295 local votes, totaling 590 votes. Those who received more than half of the votes were elected.
As none of the five candidates won more than half of the votes in the first round of voting, Takaichi and Japanese Minister of Agriculture, Forestry and Fisheries Koizumi Shinjiro entered the second round.
In the second round of the vote, 295 members of the Parliament held one vote each, each of the 47 Parliamentary Branch Federations of the Parliamentary Branch of the Provincial Municipalities of Japan had one vote each, with a total of 342 votes, and the majority of the votes were elected. In the end, in the 341 valid votes, High Market won 185 votes, higher than the 156 votes of Xiaohua and was elected the 29th President of the Parliamentary Party.
The 64-year-old, one of Japan’s right-wing politicians, defeated current Prime Minister Shapro Momo in the last round of the self-government party’s presidential election, advocating for more proactive fiscal policies and increased defense spending.
At 18: 00 local time on the 4th, sanae takaichi, the newly elected president of the Liberal Democratic Party of Japan, held a press conference.
He said that his election as the new president of the Democratic Party will bring change to the Democratic Party, will work to restore people's trust in the Democratic Party, and will fully discuss economic issues such as high prices, diplomacy, and international security issues within the Party.
On October 15, the Japanese government and the self-government party will convene an interim congress, hold elections for new prime ministers, elect a new prime minister, and form a new cabinet. Although the self-government party is a minority in both houses of the House of Representatives, because the opposition has not come together, can not act consistently, in the number of seats, the self-government party will still dominate.
Japan’s current prime minister, Shinzo Abe, said: “(Japan) does not need division and opposition, but cooperation and tolerance.In today’s complex international situation, hopefully she won’t take Japan into the way, which also requires all of us to work together.”
“High market trades”
In fact, the capital market in Japan before the election (3th) has already appeared the so-called "high-market trading", betting high-market elected president of the self-government party, look at multiple shares, while ignoring Japanese government bonds, especially long-term government bonds.
On the 6th, as Japanese stocks opened to rally, the yen weakened sharply by 1.5% against the US dollar, breaking through 150; the yen fell to a record low against the euro. Based on the analysis of Mizuho, Nomura, Goldman Sachs, Mitsubishi and other institutions, after the high market wins, the yen may depreciate to the 150 - 160 range against the US dollar, and the Bank of Japan's interest rate hike will slow down.
Japan’s bond markets were equally volatile, with concerns about future fiscal expansion driving long-term interest rates upwards, with Japan’s 40-year bond yields soaring by 14 basis points to 3.52 percent.
Tohru Sasaki, chief strategist of Fukuoka Financial Group and former official of the Bank of Japan, said: "The high market will make it more difficult for the Bank of Japan to raise interest rates, so the short-term yield will drop. At the same time, she will most likely expand fiscal spending, which is negative for government bonds. The steepening of the yield curve may become the most likely market reaction."
Japanese political scientists:
The new LDP president will face multiple pressures
Japanese political scientist Zanda Xinhua pointed out that with the frequent change of chairmen and the increasing shaking of the regime base, the new chairman of the self-government party will face multiple pressures.
In addition, there are political issues, how to ensure political stability, is also a very important issue, therefore, the current political situation in Japan is short-term issues and long-term issues coexisting, social problems and political problems intertwined, a variety of challenges can be said to come.
It is understood that data released by the Japanese private survey agency Imperial Database shows that prices of 3024 foods in Japan are expected to increase in prices in October. This is after the price increase of 4225 food items in April, the number of food items that have increased in a single month has exceeded 3000 after half a year. Against the backdrop of high rice prices, the most types of "alcoholic drinks and beverages" such as shochu and Japanese sake have increased prices.
In terms of economic data, on September 24, local time, according to the report released by Sharp Global, the Japanese manufacturing procurement managers index (PMI) in September was the initial value of 48.4, the third consecutive month below the threshold of 50.0, indicating that manufacturing activity is still in the contraction range.
Earlier, the statistical report on corporate enterprises released by the Japanese Ministry of Finance on September 1 showed that due to factors such as U.S. tariff policies, the current profit of Japan's manufacturing industry fell by 11.5% in the second quarter of this year compared with the same period last year, declining for two consecutive quarters. A relevant person from Japan's Ministry of Finance said that U.S. trade policies have exposed the Japanese economy to downside risks.
As of January 1, 2025, the total population of Japan decreased by about 900,000 compared to the previous year, decreasing for 16 consecutive years, and recording the largest decline since 1968 statistics, the population aged over 65 accounted for 29.6%, Japan institutions predict that by 2040, the Japanese labor gap will reach 11 million.
Japanese society is increasingly dissatisfied with the ruling party, anxiety about the economic prospects is rising, investors are struggling to establish stability expectations, financial markets are rapidly fluctuating, economic shocks and political turmoil interact, constituting a vicious cycle. not only constrains the effective implementation of the self-government party policy, but also makes it difficult for any new president of the self-government party to establish a solid foundation for rule.
(Declaration: The contents and data of the article are for reference only and do not constitute investment advice.
Edited|||by Kim Phuong Duo
proofreading|by Chen Junji
Image source: Visual China