In Japan, Investors Give an Exuberant Welcome to Takaichi’s Big Win

Stocks climbed on Monday as investors cheered a result seen as a mandate for the prime minister’s high-spending economic agenda.

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By River Akira Davis

Reporting from Tokyo

Feb. 8, 2026

Japanese stocks surged on Monday as investors embraced Prime Minister Sanae Takaichi’s landslide election victory, signaling a green light for her brand of expansionary fiscal policy.

The benchmark Nikkei 225 jumped 5 percent in early trading, while the broader Topix climbed by around 3 percent.

While markets were largely positioned for a Liberal Democratic Party win since Ms. Takaichi’s surprise decision in January to call for an election, Monday’s rally suggests the results were viewed as providing her a significant mandate to accelerate her economic agenda.

Ms. Takaichi is broadly viewed as a boon for corporate Japan because of her long-held backing of low interest rates and robust fiscal spending to stimulate growth. Last year, she pushed through a record supplementary budget and has since advanced large state-led investments in strategic sectors such as artificial intelligence and semiconductor manufacturing.

What has come to be called the Takaichi Trade essentially bets on higher stock prices and a weakened yen, which benefits Japan’s exporters by making their products more competitive overseas.

That trend was on display on Monday, with shares of major exporters like Toyota Motor rising as the yen softened against the dollar. Investors also snapped up shares of companies expected to benefit from her spending priorities, including those in the A.I., semiconductor, and defense sectors.

A central question for Ms. Takaichi’s agenda remains whether her expansionary policies have pushed Japan’s balance sheet to a breaking point. Last month, she signaled support for a suspension of certain consumption taxes, and bond yields surged as investors questioned the government’s ability to fund the strategy.

In an interview with the public broadcaster NHK late Sunday, Ms. Takaichi seemed to acknowledge the support for what she called her “proactive fiscal policies,” noting that heading into the vote, she felt she could not proceed with such major shifts without first seeking a mandate from the taxpayers.

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River Akira Davis covers Japan for The Times, including its economy and businesses, and is based in Tokyo.

See more on: Liberal Democratic Party (Japan)

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