Japan's Sanae Takaichi sweeps to historic election landslide

Tokyo: Japanese Prime Minister Sanae Takaichi is poised for a historic election landslide, positioning her to become the nation's strongest leader in years in an outcome that may fuel further market volatility. Her ruling Liberal Democratic Party is on track for the biggest post-war victory for a single-party in a general election in Japan, an extraordinary transformation of fortunes for a party that was on the ropes just last summer.

The LDP secured a two-thirds super majority in the 465-seat lower house by itself, according to public broadcaster NHK. A tally of results by NHK showed that the ruling coalition had already won 341 seats in the lower house, expanding its razor-thin majority of 233 by a considerable margin. The LDP's haul of 310 seats gives it the highest proportion of representatives in the lower house than any other party in post-war elections in Japan.

Takaichi had staked her job on the outcome of the snap election just months after taking office, saying she would step down if her ruling coalition failed to win a majority. The gamble appears to have paid off spectacularly, just seven months after the LDP lost control of both houses of parliament. while putting her in league with former popular Japanese leaders Shinzo Abe and Junichiro Koizumi.


The outcome gives Takaichi a mandate to push ahead with bold spending plans that have put investors on edge and a more assertive stance on the international stage, where she has clashed with China over Japan's support for Taiwan.

A super majority in the lower house would make it even easier for her coalition to pass legislation and put the contentious issue of constitutional amendment back on the table, reviving a debate that has energized nationalists and spooked advocates of Japan's longstanding pacifism.

"They had dropped three straight major elections in a row when she took over and she snapped that losing streak," said David Boling, a former deputy assistant US Trade Representative, now at the Asia Group. "She's reclaimed the momentum and now she really owns the party's future."

Investors have already been positioning for a decisive victory for the LDP, scooping up Japanese stocks and selling the yen and government bonds, as they expect an emboldened Takaichi to ramp up spending and investment to support the economy, while possibly slowing down the Bank of Japan's pace of interest rate hikes. Depending on the final outcome, the so-called Takaichi trade may either accelerate or unwind.