JPY: Takaichi victory fuels markets and policy shift – Danske Bank

Danske Bank’s Danske Research Team says Japanese Prime Minister Sanae Takaichi’s coalition secured a supermajority, giving her a strong mandate for tax cuts and higher military spending. The result drove Japanese stocks to record highs and initially weakened the Japanese Yen. Markets are framing her agenda as a new phase of Abenomics with implications for domestic assets and regional geopolitics.

Supermajority win drives Abenomics 2.0 narrative

"In Japan, Prime Minister Sanae Takaichi's coalition secured a supermajority in the lower house, winning 328 out of 465 seats following a rare winter snap election."

"The market reacted strongly to her victory, with Japanese stocks surging to record highs as the Nikkei 225 jumped 5.7%, reflecting investor optimism over her fiscal policies."

"However, bond yields climbed as concerns grew about the potential impact of her spending plans on fiscal stability, while the yen weakened initially before rebounding after verbal intervention from Japanese officials."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)