As many of her predecessors have found out, it’s one thing to win the leadership vote and a whole other to stay in office. Takaichi’s own LDP party is divided into many factions and all want to push their respective agendas at the end of the day. She’s pretty much in the hot seat now and one key reason that helped her rise is her alignment being more towards the right wing.In part, the LDP is also banking on her appeal in that sense to win back some of the conservative base – which have switched to the more right-wing Sanseito party after the recent upper house election results in July. Of course, the Nippon Ishin base is one that also aligns with the right wing but they still have key differences in viewpoints on some matters with the LDP as a whole.
This article was written by Justin Low at investinglive.com.
đź’ˇ DMK Insight
The internal divisions within Takaichi’s LDP party could create significant volatility in Japanese markets, particularly in the forex space. If factions within the party push conflicting agendas, we might see the yen react sharply, especially against the dollar. Traders should keep an eye on the USD/JPY pair, which has been hovering around key resistance levels near 150. A breakdown could signal a shift in sentiment, while a rally could indicate that the market is pricing in stability despite the political turmoil. Moreover, this situation isn’t just about Japan. Global markets are sensitive to political instability, and any perceived weakness could lead to a flight to safety, impacting assets like gold and U.S. Treasuries. Watch for shifts in the Nikkei 225 as well; if it starts to decline, it could trigger broader risk-off sentiment across Asia. Keep an eye on economic indicators like Japan’s GDP growth and inflation rates, as these will be crucial in assessing how Takaichi’s leadership impacts monetary policy. In short, the next few weeks are critical. Traders should monitor factional developments closely and be prepared for potential spikes in volatility, especially around key economic releases or party meetings.
đź“® Takeaway
Watch the USD/JPY pair closely; internal LDP divisions could trigger volatility that impacts forex and related markets significantly.






