Historic Election Win Boosts Japanese Stocks to New Heights

Mon Feb 09 2026 21:37:11 GMT+0200 (Eastern European Standard Time)

Prime Minister Sanae Takaichi's Liberal Democratic Party secures a historic majority in Japan, propelling the Nikkei 225 index past 57,000 points for the first time.

Following a remarkable election victory where the Liberal Democratic Party (LDP) secured a two-thirds majority, Japanese stocks soared, with the Nikkei 225 briefly surpassing the 57,000 mark. Prime Minister Sanae Takaichi now faces the challenge of stimulating the economy while addressing rising living costs. Her decisive government policies and support from the business sector could lay a foundation for substantial economic growth in Japan.

Japanese stocks surged to a record high on Monday, as Prime Minister Sanae Takaichi's Liberal Democratic Party (LDP) basked in a historic election victory.

The LDP secured 316 out of 465 seats in Sunday's election, the first time a single party has won a two-thirds lower house majority since Japan's parliament was established in its current form in 1947.

The Japan Innovation Party, the LDP's coalition partner, won in 36 more constituencies, taking their combined total to 352 seats.

The resounding mandate is a gamble that paid off for Takaichi, who now faces the challenge of reviving Japan's moribund economy and tackling cost-of-living woes.

The Nikkei 225 index rallied by more than 5% in early trade on Monday, briefly crossing the 57,000 mark for the first time. It then gave up some gains, but still closed up 3.9% at a record high of 56,363.94.

The LDP's decisive win will help Takaichi advance her pro-business policies without having to negotiate extensively with opposition parties.

Takaichi told reporters on Sunday that she would pursue a 'responsible yet aggressive' fiscal policy and would not reshuffle the Cabinet, which was formed less than four months ago.

Japan's first female prime minister called the snap election last month, just a few months after taking office in October. Her success is in marked contrast to her two predecessors, under whom the party lost its parliamentary majority, battled corruption scandals and struggled to curb rising costs.

Markets commentators say Takaichi's policies could boost the Japanese economy. The election outcome and upcoming moves like 'stimulus, tax tweaks, and deregulation' will be 'additional fuel for an existing bull trend', investment analyst Yuka Marosek told the BBC.

Takaichi stated, 'We bear an extremely heavy responsibility to focus on steadily delivering on the campaign pledges we have made,' as her party's victory became clear. She aims to cut taxes and increase government spending, a commitment met with both optimism and skepticism due to Japan's high debt levels.

With her leadership style and direct engagement strategies, Takaichi has won over both the conservative base and younger voters, potentially shaping a new era for Japan's governance.