SINGAPORE, Oct 6 (Reuters) - Japanese shares surged to

record highs on Monday, while the yen sank after fiscal dove

Sanae Takaichi was elected to lead the ruling party and become

the next prime minister.

Takaichi's victory has raised chances that the Bank of Japan

will avoid lifting interest rates this month, though the pause

may not last if it batters the yen.

The Nikkei surged past the 47,000 level for the

first time, while the yen weakened over 1.5% to hover

near the psychologically important 150 per U.S. dollar.

Here are some comments from investors and analysts:

CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE:

"Takaichi's win signals continuity in Japan's policy mix,

fiscal support and accommodative monetary settings are likely to

stay in place. That could mean a delay from the BOJ to tighten,

keeping financial conditions loose.

"With policy unlikely to shift soon, the yen stays under

pressure - not collapsing, but also not finding safe-haven

demand unless there's a shock. It remains the go-to funding

currency in global markets.

"That keeps the yen as the preferred funding currency for

carry trades, at least until we get closer to the 150-152

intervention zone.

"The policy continuity and weaker yen narrative should keep

supporting Japanese equities - especially exporters and

companies benefiting from inbound tourism and defence spending."

HITOSHI ASAOKA, CHIEF STRATEGIST, ASSET MANAGEMENT ONE,

TOKYO:

"The Nikkei was on course to reach as high as 48,000 by

year-end, but because Takaichi was chosen as the LDP leader, it

shot up toward that level already.

"The market welcomes her spending policy, but whether she

can achieve that goal is not certain, as the LDP is still a

minority party. The Nikkei may retreat once before year-end."

TAKAMASA IKEDA, SENIOR PORTFOLIO MANAGER, GCI ASSET

MANAGEMENT IN TOKYO:

"The market was lifted by a Takaichi surprise and when

investors realise the reality, the momentum will fade. The

hurdle for Takaichi to achieve her goal is high and she may be

able to achieve perhaps only 10% or 20% of what she wants to

do."

ALEX LOO, MACRO STRATEGIST, TD SECURITIES, SINGAPORE:

"Knee-jerk reaction higher in USDJPY and Japan equities as

her past views read to investors that she will ramp up fiscal

spending and drive Japan back towards Abenomics. Investors also

discounting a BOJ move in October but we caution against this.

"The Tankan survey reflected favorable business sentiment

and if branch regional managers feedback today also indicate

that Japan is weathering through tariffs, the BOJ should

continue with rates normalisation or risk falling further behind

the curve. We don't expect USDJPY to stay above 150 for long

given US shutdown fears and the eventual compression in US-Japan

rates differential."

CHRIS WESTON, HEAD OF RESEARCH, PEPPERSTONE GROUP LTD,

MELBOURNE:

"We're in the eye of the storm - we've heard a lot, we know

her stance from the first election. She's been a little bit more

coy in this LDP leadership race.

"We know she's a strong advocate of the Bank of Japan

keeping policy on hold. We also look to the Trump administration

[when considering central bank independence but] it's the BOJ

who has the loss of independence. The market's saying here that

she'll have some say. The repricing we've been seeing does

suggest that people bet she'll have some influence on the BOJ

thought process going forward.

"People are getting concerned about BOJ policy being behind

the curve and they've left it quite late. Inflation is in a

different spot in Japan. You could argue terminal pricing has

been too low. If markets get a whiff that she's going to do

Abenomics-lite, it could keep bond buyers out of the market. She

does need to tread a careful path if she goes down that road.

She'll be very cognisant of the UK's example."