New LDP leader Sanae Takaichi has vowed to spread the word that "Japan is Back!" Photo: AP PHOTO

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.

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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

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