Mr Shigeru Ishiba, who is set to be appointed as premier on Oct 1, supports the Bank of Japan’s drive to hike interest rates and has said “there is room” to raise corporate levies.
With Ms Takaichi a fan of former prime minister Shinzo Abe’s unorthodox “Abenomics” policies of ultra-low interest rates and tax cuts, the prospect of her winning sent stocks higher and the yen lower. The Nikkei index closed down 4.8 per cent, with Toyota tumbling 7.6 per cent and real estate company Mitsui Fudosan off 8.7 per cent.
Its poll ratings have fallen sharply under outgoing Premier Fumio Kishida, hit by a damaging party slush fund scandal and anger over rising prices.Mr Ishiba vowed on Sept 27 to restore confidence in the LDP after the scandal and to shore up defence ties among neighbours rattled by recent Chinese actions.
Mr Kishida pledged to double defence spending and deepen military cooperation with the United States and other allies in the region rattled by China’s rise and an unpredictable North Korea. Mr Taro Saito, senior economist at NLI Research Institute, told AFP that Mr Ishiba had so far focused on how to improve public finances in Japan, which has one of the world’s highest debt mountains.