Japanese stocks have hit a record high after the country’s ruling Liberal Democratic Party (LDP) named Sanae Takaichi as its new leader, positioning the pro-business politician to be Japan’s next prime minister.

The benchmark Nikkei 225 index jumped by more than 4% on Monday morning in Tokyo as it rose above 47,000 for the first time.

Takaichi is known for her support of higher public spending and lower borrowing costs.

She is also a long-time admirer of former UK prime minister Margaret Thatcher and her free market approach to economics.

Investors welcomed the announcement of her victory in the LDP leadership race, with shares rising in real estate, technology and heavy industry companies.

While the Japanese stocks rose, the yen hit a record low against the euro. It also fell by more than 1.5% against the US dollar.

If confirmed later this month as the successor to Shigeru Ishiba, Takaichi will be Japan’s first female prime minister.

She will have to contend with a sluggish economy and households grappling with higher costs and slow wage growth.

Takaichi will also have to navigate a challenging US-Japan relationship and see through a tariff deal with US President Donald Trump’s administration, which was previously agreed by the Ishiba government.