Japan’s First Female Prime Minister Sparks Market Rally and Crypto Optimism

Japan’s newly elected Prime Minister, Sanae Takaichi, has ignited a wave of optimism across financial markets, with her election driving the Nikkei index to its highest level in history. The benchmark Nikkei 225 surged 4.75% on Monday, closing at 47,734.04, following Takaichi’s victory over the weekend. Her win positions her to become Japan’s first female prime minister when she officially takes office on October 15.

Pro-Growth Agenda Fuels Investor Confidence

Takaichi is known for her pro-growth economic stance, advocating for low interest rates, aggressive fiscal stimulus, and tax cuts aimed at revitalizing Japan’s sluggish economy and countering the effects of a weakening yen. During her campaign, she was the only candidate proposing both expansive government spending and continued monetary easing—an approach that resonated strongly with voters and investors alike.

A History of Innovation-Friendly Policies

Although Takaichi has yet to comment directly on Bitcoin (BTC), her track record suggests an openness toward innovation and digital assets. As Japan’s Minister for Internal Affairs and Communications in 2019, she supported the legality of cryptocurrency donations to individual politicians, clarifying that such contributions were not subject to disclosure under Japan’s Political Funds Control Act.

Macroeconomic Tailwinds Boost Bitcoin

The political momentum in Japan coincides with broader global uncertainty. Amid the U.S. government’s first shutdown since 2018, investors have been turning to alternative stores of value such as gold and Bitcoin. Over the weekend, Bitcoin surged past $125,700, setting a new all-time high, buoyed by macroeconomic pressures and increased risk appetite.

“Iron Lady” Expected to Strengthen Crypto Sentiment

Sanae Takaichi’s election could strengthen crypto sentiment among Japanese investors, said Charles d’Haussy, CEO of the dYdX Foundation, which oversees the decentralized trading protocol dYdX. He described her as Japan’s “Iron Lady,” adding that her expected looser monetary policies have already contributed to Bitcoin’s record performance against the yen.

Beyond monetary policy, d’Haussy noted that Takaichi’s supportive regulatory approach could lead to clearer rules and broader adoption of digital assets in Japan.

Toward a More Crypto-Friendly Framework

Takaichi’s arrival comes as Japanese regulators continue to explore ways to integrate digital assets into the nation’s financial system. Earlier this year, the Financial Services Agency (FSA) proposed reclassifying cryptocurrencies as financial products under the Financial Instruments and Exchange Act (FIEA). The move would pave the way for crypto exchange-traded funds (ETFs) and introduce a 20% tax rate on digital asset income, aligning crypto with traditional securities.

This regulatory shift builds on former Prime Minister Fumio Kishida’s “New Capitalism” strategy, designed to modernize Japan’s investment landscape and attract global capital. Under Takaichi’s leadership, that vision may gain fresh momentum—both in the stock market and the rapidly evolving crypto sector.