Japanese stocks surged on Monday as markets reacted positively to Prime Minister Sanae Takaichi’s landslide victory in the snap general election, which media outlets described as a historic result.
The benchmark Nikkei 225 index jumped more than five percent in early trading, briefly crossing the 57,000 mark for the first time. The Japanese yen also strengthened against the US dollar, while government bond prices fell.
Public broadcaster NHK projected that the ruling Liberal Democratic Party secured 316 seats in the 465 member lower house. Together with its coalition partner, the Japan Innovation Party, the alliance won a total of 352 seats, giving it a two thirds majority.
This marks the strongest election result for a single party in post war Japan since the current parliamentary system was established in 1947.
Takaichi called the snap election after becoming Japan’s first female prime minister last October through a vote by lawmakers. She sought a direct mandate from voters, a move that was widely seen as risky but ultimately paid off.
The victory reverses recent political setbacks for the LDP, which had lost its majority under previous leaders. The election came at a time when Japan is facing rising living costs, weak economic growth and pressure from an ageing population.
Market analysts said investors welcomed the political stability created by the decisive result. Takaichi has pledged to cut taxes, increase government spending and push pro business reforms, which helped boost market confidence.
Speaking earlier, Takaichi said her priority would be reviving the economy, raising wages and addressing the cost of living crisis. She has also promised higher defence spending, stricter immigration rules and a review of foreign ownership of land.
US President Donald Trump congratulated Takaichi and her coalition on what he called a landslide victory. He praised her leadership and reaffirmed strong support for Japan, one of Washington’s closest allies.
Takaichi now faces the challenge of delivering economic recovery while managing strained ties with China and navigating domestic debate over her conservative views on social and gender issues.
With inputs from BBC