August M
Japanese stocks surged to record levels at the start of the week, reflecting investor optimism and mounting expectations that the country’s new leadership will act decisively to revive a strained economy.
The rally came as voters handed Prime Minister Sanae Takaichi a powerful mandate that could shape Japan’s economic direction for years, reports the BBC.
Investors vote first
The Nikkei 225 jumped more than 5% in early trading on Monday, briefly climbing above the 57,000 mark for the first time. Market commentators told the BBC that investors were reacting to the prospect of political stability and fewer obstacles to economic reform.
Investment analyst Yuka Marosek said the election result, combined with possible “stimulus, tax tweaks, and deregulation,” would provide “additional fuel for an existing bull trend,” according to the BBC.
Economy under strain
The market surge masks deep economic anxieties. After decades of low inflation, Japan has become increasingly sensitive to rising living costs. Voters interviewed by the BBC said they were concerned about higher grocery prices and rent.
Longer-term pressures are also weighing on growth. An ageing population has reduced the workforce and driven up social care costs, leaving policymakers with limited options. Takaichi has promised tax cuts and higher spending, though critics warn that Japan’s heavy public debt could constrain her plans.
Landslide confirmed
Against this backdrop, voters delivered a historic election result. Takaichi’s Liberal Democratic Party won 316 of the 465 seats in Sunday’s lower house election, the first time a single party has secured a two-thirds majority since Japan’s parliamentary system took its current form in 1947, according to results cited by the BBC.
The Japan Innovation Party, the LDP’s coalition partner, captured 36 additional seats, giving the governing bloc a total of 352. The scale of the victory sharply reduces the influence of opposition parties on legislation.
Power and promises
Takaichi called the snap election just months after taking office and described her economic approach as “responsible yet aggressive.” She said she would not reshuffle the cabinet formed less than four months ago.
“We bear an extremely heavy responsibility to focus on steadily delivering on the campaign pledges we have made,” Takaichi said, according to Kyodo. Her win follows years of turbulence for the LDP under her predecessor Shigeru Ishiba, when the party lost its majority amid scandals and economic frustration.
Global spotlight
The result also drew international attention. US President Donald Trump congratulated Takaichi on Truth Social, calling it an “Honor” to endorse her. Takaichi is due to travel to Washington in March for further talks.
Sources: BBC, Kyodo
