Sanae Takaichi elected Japan’s first female prime minister

Sanae Takaichi became Japan’s first female prime minister after securing the numbers in the lower house and then winning confirmation in the upper chamber, capping a whirlwind day that also saw markets rally on expectations of policy continuity. A staunch conservative aligned with the late Shinzo Abe, she takes office pledging to revive growth while navigating the squeeze of higher prices, and to steer a firmer line on immigration and national security.

Her victory followed a deal between the ruling Liberal Democratic Party and the right-leaning Japan Innovation Party (Ishin). Even together, the two are just short of an outright lower-house majority, meaning Takaichi’s political footing will depend on winning over additional lawmakers on key votes. She quickly named a cabinet that included only two women — Satsuki Katayama as the country’s first female finance minister and Kimi Onoda as economic security minister — far fewer than the Nordic-style gender balance she had once promised.

Investors responded to what traders called the “Takaichi trade,” pushing the Nikkei to record highs on expectations of renewed, Abenomics-style stimulus. At the same time, the yen and government bonds wobbled on concerns about larger deficits. Analysts cautioned that policies crafted to fight deflation may not cleanly fit today’s inflationary backdrop and could collide with Ishin’s preference for fiscal restraint.

Takaichi has vowed to deepen security ties with the United States, raise defense spending and seek constitutional revisions to formalise the role of Japan’s military. She is expected to be sworn in as the nation’s 104th premier, succeeding Shigeru Ishiba, and will face immediate tests ranging from cost-of-living strains to a more fractured political landscape energized by smaller right-wing parties.