Following Sanae Takaichi’s decisive victory in the Lower House election, the yen weakened to nearly 160 against the U.S. dollar, while the Nikkei 225 stock index reached a new record high. Takaichi’s leadership helped the ruling Liberal Democratic Party secure 316 seats, marking the largest election win in Japan since World War Two. Additionally, Japanese government bond yields rose amid expectations of continued economic policies.
**Why this matters**
The election outcome signals strong support for the current government’s economic agenda, which includes maintaining loose monetary policy to stimulate growth. The weaker yen may boost Japan’s export-driven economy but also raises concerns about import costs. Investors are closely watching how these developments will influence Japan’s financial markets and broader economic outlook.
Source: NewsData