Japanese stocks surged to a record high as markets opened on Monday morning, following Prime Minister Sanae Takaichi's Liberal Democratic Party (LDP) historic election victory.
The LDP secured 316 out of 465 seats in Sunday's election, marking the first time a single party has captured a two-thirds lower house majority since Japan's parliament was reformed in 1947.
The Japan Innovation Party, a coalition partner of the LDP, added 36 seats to their total, bringing the combined strength to 352 seats.
Prime Minister Takaichi now faces the challenge of rejuvenating Japan's stagnant economy while addressing mounting concerns over the cost of living.
In early trading, the Nikkei index climbed by more than 5%, briefly exceeding the significant threshold of 57,000 points for the first time.
The decisive win positions Takaichi to advance her pro-business agenda without extensive opposition negotiation.
On Sunday, Takaichi pledged a responsible yet aggressive fiscal approach, choosing to retain her current Cabinet, which was formed only months ago.
As Japan's first female prime minister, Takaichi's snap election initiative has yielded results in stark contrast to her predecessors, who faced significant challenges including corruption scandals and economic downturns.
Market analysts believe her policies could bolster economic recovery, with potential strategies like stimulus measures, tax adjustments, and deregulation serving as catalysts for ongoing market momentum.
However, persistent inflation and rising living costs remain pressing issues for voters, as highlighted in recent polling.
Takaichi also promised tax cuts and increased spending to bolster the economy, despite concerns over Japan's substantial national debt. We bear an extremely heavy responsibility to focus on steadily delivering on the campaign pledges we have made, she emphasized.
Her administration's success will hinge on addressing Japan's aging demographic trends, a shrinking workforce, and rising social care costs.
Internationally, US President Donald Trump congratulated her victory, reiterating strong support for Japan’s decisions under her leadership.
Takaichi is anticipated to visit Washington for a follow-up meeting with Trump, reaffirming Japan's strategic alliances in the near future.
