Japan's ruling party has picked hardline conservative Sanae Takaichi as its head, putting her on course to become the country's first female prime minister in a move set to jolt investors and neighbours.

The Liberal Democratic Party, which has ruled Japan for almost all of the postwar era, elected Takaichi, 64, to regain trust from a public angered by rising prices and drawn to opposition groups promising stimulus and clampdowns on migrants.

A vote in parliament to choose a replacement for outgoing Shigeru Ishiba is expected on October 15.

Takaichi is favoured as the ruling coalition has the largest number of seats.

Takaichi, the only woman among the five LDP candidates, beat a challenge from the more moderate Shinjiro Koizumi, 44, the son of popular former prime minister Junichiro Koi

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