Sanae Takaichi Elected Japan’s First Female PM with Markets Surging – Could This Unlock Cryptocurrency Tax Reforms?

Sanae Takaichi Emerges as Japan’s First Female Prime Minister Driving Market Rally and Crypto Speculation

Japan’s political landscape has entered uncharted territory with the election of Sanae Takaichi as the leader of the Liberal Democratic Party (LDP), positioning her to become the country’s first female prime minister during the extraordinary Diet session on 15 October 2025.

Investors responded immediately, pushing the Nikkei 225 up by 4.3% to a record 47,734.04, while the yen weakened nearly 1.6% against the U.S. dollar amid expectations of continued pro-growth policies and fiscal stimulus.

Bitcoin surged to $125,653, reflecting renewed appetite for alternative assets, and gold hit a record high above $3,900, signalling safe-haven demand amid global economic uncertainties.

Will Takaichi’s Pro-Growth Policies Trigger Cryptocurrency Tax Reforms?

Takaichi, often called Japan’s “Iron Lady” for her admiration of Margaret Thatcher, has championed economic expansion and ending deflation through fiscal measures, including tax reductions.

While she has not spoken directly on cryptocurrency, her approach could create conditions favourable for reforming digital asset taxation.

Japan’s Financial Services Agency (FSA) proposed aligning cryptocurrency gains with equities at around 20%, compared with the current progressive rate of up to 55%, and allowing loss carryforwards for up to three years.

By potentially working with opposition parties such as the Japan Innovation Party and the Democratic Party for the People, which have long supported crypto tax reform, Takaichi could accelerate the implementation of these policies during the 2026 Diet session.

Could Cooperation With Opposition Parties Shape Japan’s Crypto Landscape?

Takaichi’s openness to collaborating with opposition groups stands out as a key factor for potential reform.

The Democratic Party for the People, led by Yuichiro Tamaki, has repeatedly criticised former Prime Minister Ishiba’s cautious approach to cryptocurrency taxation.

Similarly, the Japan Innovation Party favours deregulation and tax cuts, aligning with Takaichi’s economic strategy.

Such alliances could provide the legislative momentum required to introduce separate taxation for crypto gains, address loss carryforwards, and integrate reforms within broader fiscal policies.

Trump Summit May Influence Japan’s Crypto Direction

Takaichi faces her first major foreign policy test with the scheduled summit with U.S. President Donald Trump in late October.

Trump, advocating for policies such as Bitcoin strategic reserves and a cryptocurrency advisory committee, shares Takaichi’s pro-growth focus.

Discussions between the two leaders could explore digital asset regulation and economic coordination.

However, Takaichi’s more conservative stance may temper alignment with Trump’s crypto initiatives, suggesting Japan’s approach could remain measured despite potential openings for reform.

Economic and Market Impacts Remain Complex

Despite optimism over tax cuts and potential crypto reforms, Takaichi’s aggressive fiscal approach may trigger inflationary pressures, possibly prompting the Bank of Japan to tighten monetary policy.

This could act as a headwind for risk assets, including cryptocurrencies.

Cabinet appointments, such as Finance Minister Katsunobu Kato’s continued tenure, may influence policy continuity, while Digital Minister Masaki Taira has yet to outline positions on Web3 or crypto regulation.

Her focus on traditional sectors like semiconductors and manufacturing could deprioritise digital assets, balancing potential reforms against conservative oversight.

Japan’s Political Shift Could Redefine Crypto and Financial Markets

From Coinlive’s perspective, Takaichi’s rise is a pivotal moment for Japan’s markets and digital asset sector.

Her pro-growth and tax-reduction policies, coupled with possible collaboration with crypto-friendly opposition parties, could finally unlock long-anticipated reforms in cryptocurrency taxation.

Yet, her conservative tendencies, fiscal risks, and limited direct engagement with crypto create a landscape of both opportunity and caution.

Investors and industry participants will closely watch Cabinet appointments and the outcome of the Trump summit for signals on Japan’s next steps in digital asset regulation and market strategy.