TOKYO, Oct 6, 2025 (BSS/AFP) - Japanese stocks soared over 4 percent and the yen fell Monday, after Sanae Takaichi won a leadership election to run the ruling party.

Takaichi, likely to become prime minister this month, has in the past backed aggressive monetary easing and big fiscal spending, echoing her mentor, former premier Shinzo Abe.

During the campaign however she toned down her calls for fiscal expansion and opposition to Bank of Japan rate hikes amid rising prices.

"Still, she looks more inclined than the others to juice the economy," said Taro Kimura at Bloomberg Economics.

On Saturday, Takaichi pledged to first to implement measures to address inflation and boost the economy, rural areas and primary industries such as farming and fisheries.

"Still, with inflation rising and long-term (bond) yields climbing, she will have to balance her stance with reality, in order not to accelerate cost-of-living squeeze and jolt the rate market," Kimura said.

In morning trade, the Nikkei 225 pulled back slightly but was up 3.76 percent, while the yen fell, hitting 149.76 yen against the dollar.

The currency hit a new record low against the euro.