Expectations for virtual asset market gains rise with Takaichi's inauguration in Japan

Japan's newly elected prime minister, Sanae Takaichi, is sparking renewed optimism in risk asset markets such as stocks and virtual assets (cryptocurrencies) ahead of her inauguration. Since Takaichi's election, Japan's Nikkei (Nikkei) index has hit an all-time high, reflecting expectations of a recovery in investor sentiment.

According to Cointelegraph on the 6th (local time), the Nikkei index closed at 47,734.04 points, up 4.75% from the previous trading day, marking an all-time high. This occurred immediately after Takaichi's victory in the LDP leadership election held on the 5th; she is scheduled to officially take office on October 15 as Japan's first female prime minister.

Takaichi is regarded as a representative pro-growth figure who supports maintaining a low-interest-rate stance, tax cuts, and large-scale stimulus measures. Against the backdrop of a weak yen and expectations from voters who want economic stimulus, she was the only candidate to advocate large-scale fiscal spending and an accommodative monetary policy simultaneously.

Although she did not directly mention Bitcoin (BTC), Takaichi has shown a pro-innovation attitude toward virtual assets during her tenure as Minister of Internal Affairs and Communications. In 2019, she stated, "Donations in virtual assets are not subject to disclosure under the Political Funds Control Law in the same way as cash or securities," thereby recognizing donations of virtual assets by individual politicians as legal.

Charles d'Haussy, CEO of the dYdX Foundation, said, "The election of Iron Lady Takaichi as prime minister raises expectations for accommodative monetary policy and is stimulating virtual asset investment sentiment in Japan," adding, "That Bitcoin set an all-time high in yen terms also reflects this mood." He also added, "Takaichi's friendly regulatory approach will accelerate the adoption of virtual assets in Japan."

Meanwhile, Japan's Financial Services Agency (FSA) has already been pursuing regulatory reforms to revitalize the virtual asset market under former Prime Minister Fumio Kishida's 'New Capitalism' strategy. In June, it proposed reclassifying virtual assets as 'financial instruments' under the Financial Instruments and Exchange Act (FIEA), opening the possibility for the launch of cryptocurrency exchange-traded funds (ETFs) and the introduction of a 20% tax on virtual asset income.