Japan Agonistes

Japanese stocks surged after the election of Sanae Takaichi as prime minister, but investors’ enthusiasm may be premature. Japan’s first female leader is all for continued easy monetary policy, which puts her at odds with the Bank of Japan. Takaichi may be prioritizing “short-term sugar highs” over the supply-side reforms that Japan’s economy sorely needs, William warns. Her desire to prolong the weak-yen era is risky at a time of accelerating inflation, disappointing wage growth, gigantic public debt, and the need to wean Japan off exports to mitigate US tariff pain.