Japan's own 'Iron Lady' Sanae Takaichi emerged as the new leader for ruling Liberal Democratic Party or LDP on Oct. 4, 2025, positioning her well on the ladder to becoming the country's first female premier, much like her idol Margaret Thatcher did in the United Kingdom.The win was a surprise to many as Bloomberg's data on prediction-market bettors suggested that until the final minutes, her 44-year-old competitor Shinjiro Koizumi, who is also the offspring of a former prime minister, had stronger chances of winning.Moreover, her victory also caused a stir in the Japanese market pot. Not long after Takaichi assumed her new role as the leader, Japan's stocks went soaring with the benchmark Nikkei 225 index closing 4.75% higher on Oct. 6 and ending the day above 47,000 for the first time.At the same time, Yen had the worst day since US-China trade armistice in May was announced and fell by 1.7% against the US green back while bonds wobbled.What prompted the investors' mixed sentiments on Monday?Market's Response To 'Takaichi-Trade'Mentee of the late Prime Minister Shinzo Abe, Takaichi is known to be a pro-business voice who is big on increased government expenditure and cheaper borrowing.Takaichi, who has a tight grip around her mentor's strategic bow of 'Abenomics', will most likely release its "arrows" if appointed as the prime minister. These arrows include a stimulative fiscal and monetary policy, and reforms to force companies to release the cash they were holding.Therefore, boosting businesses on the back of more government expenditure and tax cuts.Stock market had an almost identical reaction when Abe was in power, with the Nikkei more than doubling under his leadership of nearly eight years.However, during her mentor's term the Yen had depreciated by roughly 18% before he left office in 2020. Investors' caution towards the currency may have surfaced after drawing this parallel.Japan's economy has since splintered in different ways, the country is currently dealing with inflation, as opposed to deflation during Abe's term, along with slow wage growth and higher household costs.A weaker Yen may make Japan's exports more competitive, but will draw in import inflation, an existing pain point for LDP.Moreover, if confirmed in her role she would have to strike a trade deal with the United States and smoothen their rocky relationship.Hurdles In The WayIn a surprising move, the ruling coalition has split up on Friday after the allied Komeito party announced that is it is parting ways from the LDP.The split will likely prove to be a major hurdle in Takaichi's path to power. Party leader Tetsuo Saito announced that his party is quitting the coalition because the LDP's "inadequate" explanation over its handling of a political funding scandal that plagued the party.To which Takaichi responded, "We have cooperated over the last 26 years, including when we were out of power. That this relationship is coming to such a conclusion is extremely regrettable".