Takaichi’s Sanaenomics Spurs 11% Nikkei Rally Amid Yen Slide

Sanaenomics, the economic strategy of Japan’s new Prime Minister Sanae Takaichi, revives Abenomics-style monetary easing and fiscal flexibility. Since her confirmation in early October, the Nikkei 225 has surged 11%, driven by expectations of sustained fiscal loosening. The yen has weakened to around ¥154 per USD despite lower U.S. Treasury yields, as markets price in dovish Bank of Japan policies under Sanaenomics. Analysts at ING and Capital Economics warn that BoJ verbal interventions could appear if the yen nears ¥160, though outright intervention remains unlikely in the near term. Reduced volatility from delayed U.S. economic data has reignited the yen carry trade, further pressuring the currency. U.S. Treasury Secretary’s public support for BoJ independence contrasted with Japan’s finance minister downplaying external influence. Traders should monitor policy statements, BoJ meetings, and key yen thresholds to balance equity gains against currency risk.