Sweeping Takaichi's coalition win 'positive surprise' for investors, says analyst

Record ID: 2338526

  • Title: Sweeping Takaichi's coalition win 'positive surprise' for investors, says analyst
  • Date: 9th February 2026
  • Summary: TOKYO, JAPAN (FEBRUARY 9, 2026) (REUTERS) **WARNING: CONTAINS FLASH PHOTOGRAPHY*** (SOUNDBITE) (Japanese) EXECUTIVE CHIEF ECONOMIST AT DAI-ICHI LIFE RESEARCH INSTITUTE, TOSHIHIRO NAGAHAMA, SAYING: “On the other hand, in the bond and foreign exchange markets, there is a risk that the responsible, proactive fiscal policy may turn into a slightly expansionary fiscal policy, a
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  • Keywords: Japan LDP analyst bond market coalition economy election fx market nikkei results sanae takaichi win
  • Location: TOKYO, JAPAN / GYEONGJU, SOUTH KOREA
  • City: TOKYO, JAPAN / GYEONGJU, SOUTH KOREA
  • Country: Japan
  • Topics: Asia / Pacific,Economic Events,Equities Markets
  • Reuters ID: LVA001378309022026RP1
  • Aspect Ratio: 16:9
  • Story Text: Japanese stocks swept on Monday (February 9) to all-time peaks—an assuring sign that the massive election win for Prime Minister Sanae Takaichi’s coalition was a “big, positive surprise” for investors, a senior equities analyst told Reuters.
    “The Takaichi administration performed better in the election than expected. So the stability of the administration’s foundation, and the expectation that their policies will be easier to advance—led to additional buying, I think,” said Toshihiro Nagahama, executive chief economist at Dai-Ichi Life Research Institute.
    Takaichi's Liberal Democratic Party (LDP) won a landslide 316 of the 465 seats in parliament's lower house in Sunday's (February 8) snap election, giving her a solid mandate to push through big spending and promised tax relief. But she has repeatedly stressed that her stimulus plans will not blow out the nation's finances, a major concern for markets given Japan already has the developed world's heaviest debt burden.
    According to Nagahama, Takaichi's big win may be the best result for bond investors, because the LDP won't need to compromise with opposition parties targeting even deeper tax relief and broader fiscal stimulus.
    “In fact, the worst-case scenario for the bond market would be that the ruling party didn’t win many seats,” he told Reuters.
    The 30-year Japanese government bonds yield surged to a record 3.88% last month when Takaichi initially pledged to suspend the tax on food for two years, but has been well below that for the past two weeks. She has said that she won't fill the estimated 10 trillion yen ($63.85 billion) shortfall with new bond issuance.
    “The ruling party’s proposal—cutting the consumption tax on food items to 0% for two years and then restoring it—faces hurdles. The fiscal cost, the impact on restaurants, and whether it can really be restored afterward. So even if something is implemented, I think it could be in a slightly different from the plan of suspending the food tax for two years,” Nagahama added. 
    Takaichi, 64, called the rare winter snap election to capitalise on her buoyant personal approval ratings since she was elevated to lead the long-ruling LDP late last year.
    Voters have been drawn to her straight-talking, hardworking image, but her nationalistic leanings and emphasis on security have strained ties with Japan's powerful neighbour China, while her promises of tax cuts have rattled financial markets.
    (Production: Joseph Campbell, Fred Mery)
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