Japanese Stocks Soar 4% Yen Dives Bitcoin Hits Record High

Sanae Takaichi's election as Japan's new Prime Minister has sparked significant market reactions, with Japanese stocks soaring to record highs and the yen falling sharply against the U.S. dollar, nearing 150 yen per dollar. Her pro-stimulus stance and support for continued accommodative monetary policies have tempered expectations for near-term interest rate hikes by the Bank of Japan, leading investors to favor fiscal expansion and government-central bank cooperation. This environment has driven increased investor interest in alternative assets like Bitcoin and gold, both reaching new all-time highs amid global economic uncertainties and the ongoing U.S. government shutdown. Despite concerns about possible fiscal overreach, analysts view Takaichi's approach as aligned with the Bank of Japan's cautious policy normalization, calming some market fears. Meanwhile, broader Asian markets showed mixed activity due to regional holidays, and global currencies reacted variably, with the U.S. dollar strengthening against European currencies. The combination of Japan's shifting economic policies and global factors is shaping a complex investment landscape favoring risk assets and inflation hedges alike.