How did Takaichi’s win trigger record Nikkei and Bitcoin?

Sanae Takaichi’s historic election as leader of Japan’s ruling Liberal Democratic Party sent shockwaves through global financial markets. Japan’s benchmark Nikkei 225 surged more than 4% on October 6, hitting intraday highs above 48,000, a first for the index.

Investors have embraced Takaichi’s agenda, which signals expansive fiscal spending and accommodative monetary policies reminiscent of those of former Prime Minister Shinzo Abe's era.

Bitcoin and gold also rallied dramatically. Bitcoin soared to an all-time high of $125,689, benefiting from record inflows into Bitcoin exchange-traded funds.

Gold broke through the $3,900-per-ounce barrier as safe-haven buying increased amid uncertainties surrounding the U.S. federal government shutdown.

What factors drove the Nikkei to record highs after Takaichi’s win?

The Nikkei rallied on expectations that Takaichi will revive aggressive economic stimulus policies. Analysts highlight her commitment to boosting growth through fiscal spending and loose monetary measures.

Heavy industry stocks led the charge, with Mitsubishi Heavy Industries and Japan Steel Works posting double-digit gains.

Hitoshi Asaoka, chief strategist at Asset Management One, remarked that the Nikkei was poised to reach the 48,000 level by year-end, but Takaichi’s selection accelerated this milestone. Her pro-growth stance energized market optimism about Japan’s economic trajectory.

Did you know?
The Nikkei 225 reached intraday highs above 48,000 for the first time ever after Takaichi’s election victory.

How did Bitcoin and gold respond to the political shift in Japan?

Bitcoin extended its strong 2025 performance, reaching record prices amid growing institutional interest. The massive inflows into Bitcoin-related ETFs suggest investors view it as a hedge amid currency swings and fiscal uncertainty.

Concurrently, gold prices surged past key resistance levels, reflecting continued safe-haven demand during the ongoing U.S. government shutdown.

The combination of political change in Japan and uncertainty in the United States propelled investor interest in scarce assets, underpinning these historic highs.

Why did the Japanese yen weaken sharply following the election?

The yen fell to its lowest level against the dollar and euro in months, crossing 150 yen per dollar. Traders interpreted Takaichi’s win as reducing the likelihood of Bank of Japan interest rate hikes. The market-implied probability of a hike dropped sharply after the election.

Mahjabeen Zaman, head of FX Research at ANZ, noted the political uncertainty and fiscal risks under Takaichi would encourage Bank of Japan caution despite some supporting economic data, weakening the currency further.

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What market expectations are tied to Takaichi’s pro-growth policies?

Takaichi’s agenda closely aligns with “Abenomics,” leaning on fiscal stimulus and accommodative monetary policy to spur growth. Markets anticipate that increased government spending, combined with the Bank of Japan's cautious stance, will persist.

Investors expect this approach to sustain asset price rallies, though some caution remains about geopolitical and global economic uncertainties that could affect long-term momentum.

How are global investors reacting to these rapid market changes?

The surge in Japan’s equity and crypto markets, while the yen weakens, exemplifies a “debasing trade,” as investors shift from traditional currencies into alternative assets.

This shift reflects growing anxiety about global monetary stability and a decline in confidence in traditional stores of value during times of uncertainty.

The market reaction highlights a pivotal moment where political shifts, fiscal policy, and investor psychology converge, shaping the global financial landscape for the future.