Sanae Takaichi is set to become Japan’s first female prime minister, advocating for expansionist economic policies. This may lead to the central bank avoiding interest rate hikes this month, as she prioritizes fiscal and monetary policy to reflate demand and the economy.

Takaichi’s win complicates the Bank of Japan’s stance on rate hikes, as she aims for demand-driven inflation to boost corporate profits. Analysts predict a delay in the next rate increase until early next year, as Takaichi’s administration may push back against tightening measures due to rising global uncertainties.

Takaichi’s advocacy for “Abenomics” and reflationist policies contrasts with previous leaders, potentially affecting the BOJ’s plan to roll back stimulus. Delaying rate hikes could lead to sharp yen falls and import price increases, impacting inflation and exchange rates. Diplomatic considerations may also influence Takaichi’s stance on monetary policy, especially with a potential visit from President Trump.

Read more at Yahoo Finance: Takaichi win as Japan leader may delay, not derail, BOJ rate hikes