Japanese stocks surged to record levels on Monday after Prime Minister Sanae Takaichi led the ruling Liberal Democratic Party (LDP) to a historic election victory.
The benchmark Nikkei 225 Index rallied by more than 5 per cent in early trading, briefly crossing the 57,000 mark for the first time in history.
LDP Records Landmark Win
In Sunday’s general election, the LDP secured 316 out of 465 seats, marking the first time since 1947 that a single party has won a two-thirds majority in Japan’s lower house.
With its coalition partner, the Japan Innovation Party, winning 36 seats, the ruling alliance now controls 352 seats, giving Takaichi a strong mandate to govern.
Market Reacts Positively
Analysts say the decisive victory has boosted investor confidence, as it reduces political uncertainty and strengthens policy continuity.
The strong mandate is expected to help Takaichi push forward pro-business reforms without heavy opposition interference.
Investment analyst Yuka Marosek told the BBC that expected policies such as stimulus packages, tax adjustments, and deregulation would further fuel Japan’s bullish market trend.
Economic Challenges Ahead
Despite market optimism, Japan continues to face major economic challenges, including rising living costs, an ageing population, and shrinking workforce.
Many voters cited concerns over increasing prices of food, rent, and utilities during the election.
Takaichi has promised to cut taxes and increase government spending to stimulate growth. However, critics warn that Japan’s high public debt could limit her plans.
Takaichi’s Policy Direction
Speaking after her victory, Takaichi pledged to pursue a “responsible yet aggressive” fiscal policy and confirmed she would not reshuffle her cabinet.
She said her administration would focus on fulfilling campaign promises and restoring economic stability.
Japan’s first female prime minister called the snap election just months after taking office in October, a move that has now paid off politically.
Growing Popularity Among Voters
Takaichi has strengthened support among conservative voters by promoting traditional values and constitutional reforms.
At the same time, she has gained popularity among younger citizens, becoming a cultural icon through her personal style and public image.
International Reactions
US President Donald Trump congratulated Takaichi on her victory, describing it as an honour to support her campaign.
He praised Japanese voters for their strong participation and reaffirmed US-Japan relations.
Takaichi is scheduled to visit Washington in March for further diplomatic talks.
Outlook for Japan’s Economy
Experts believe Takaichi’s strong political backing could accelerate economic reforms and attract more foreign investment.
However, success will depend on her ability to balance growth policies with debt management and social welfare demands.
Investors will closely watch her next steps in fiscal and regulatory reforms.
