Japan PM Takaichi's party wins landslide election victory
What's the story
Japanese stocks surged on Monday after Prime Minister Sanae Takaichi's coalition secured a landslide victory in the recent elections. Takaichi hailed the win as a "historic victory." The ruling Liberal Democratic Party (LDP) and its ally, the Japan Innovation Party, won 352 out of 465 seats in the lower house. This marks a significant turnaround for the LDP, which had lost its parliamentary majority under previous leadership.
Economic focus
Takaichi's historic victory
Takaichi had called for a snap election to secure her mandate after becoming the country's first female PM last October. The election was held amid rising living costs and sluggish economic growth in Japan. "We bear an extremely heavy responsibility to focus on steadily delivering on the campaign pledges we have made," Takaichi was quoted as saying by KYODO News after her party's victory was confirmed.
Cabinet continuity
Takaichi to keep current cabinet
Takaichi has also said she will keep her current Cabinet, which was formed less than four months ago. She described it as a "good team." The Japan Innovation Party will not take any ministerial posts under their coalition deal with the LDP. Takaichi has promised to pursue a "responsible yet aggressive" fiscal policy to boost Japan's economy, which has struggled with sluggish growth for decades.
Market reaction
Economic boost expected from election outcome
As a result, the Nikkei 225 stock index rose over 5% in early trade on Monday, while the yen rose by around 0.5% against the US dollar, the BBC reported. The election outcome is expected to ease political uncertainty and boost Japan's economy. Investment analyst Yuka Marosek told the BBC the result will be "additional fuel for an existing bull trend." Professor Ulrike Schaede added that Takaichi's victory "makes Japan strong."
Diplomatic efforts
Takaichi to visit Washington for trade talks with Trump
Takaichi is set to visit Washington in March for talks with President Donald Trump, who endorsed her before the election. Their meeting will focus on trade and Japan's relationship with China. Domestically, Takaichi has promised higher government spending and tax relief, but critics warn this could destabilize Japan's economy further. She also plans to boost defense spending and tighten immigration rules while reviewing restrictions on foreign ownership of Japanese land.