Japan set for first woman PM

Japan's ruling LDP will sign a coalition deal later Monday, its new partner party said, paving the way for Sanae Takaichi to become the country's first woman premier and lifting the Nikkei to a new record.

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The 11th-hour announcement by the Japan Innovation Party (JIP) came just a day before the lower house was due to vote on Takaichi's appointment as the fifth prime minister in as many years.

"After giving it careful thought last night, I telephoned (LDP) president Takaichi this morning to reach a coalition agreement," said Hirofumi Yoshimura, JIP co-head.

"At 6:00 pm, we will formally sign the agreement," he told reporters.

Takaichi, 64, seen as a China hawk and traditionalist from the right wing of the ruling Liberal Democratic Party (LDP), won the party leadership this month.

But her bid to become premier was derailed by the collapse of the LDP's coalition with the Komeito party after 26 years.

Komeito said the LDP had failed to tighten party funding rules following a damaging slush fund scandal.