Asian Markets Rise After Takaichi Election Win While US Futures Slip

Asian markets moved higher after Japanese Prime Minister Sanae Takaichi secured a two-thirds supermajority in a historic election landslide, boosting expectations of fiscal stimulus and policy continuity.

Markets across the region edged up on Monday as Takaichi’s Liberal Democratic Party (LDP) delivered a decisive victory, giving investors greater political clarity. Japan’s Nikkei 225 climbed roughly 4%, Hong Kong’s Hang Seng rose 1.76%, South Korea’s Kospi gained 4.10%, and China’s SSE Composite added about 1.41%.

European markets presented a mixed picture. The STOXX Europe 600 traded marginally higher around midday CET, while France’s CAC 40 and the UK’s FTSE 100 declined. Germany’s DAX rose 0.18%, and Spain’s IBEX 35 advanced 0.44%. Attention now shifts to the New York open, with US futures trending lower.

Precious metals also strengthened. Gold rose approximately 0.72%, moving back above $5,000, while silver gained more than 2% to just under $80 per ounce.

The Japanese yen strengthened following the election outcome, snapping six consecutive days of losses. Takaichi pledged to continue “responsible and proactive fiscal policies,” although uncertainty remains over whether her administration will favour a weaker currency.

Japan’s first female prime minister has regained substantial support for the LDP after recent setbacks linked to inflation and corruption concerns. Takaichi also signalled plans to suspend sales tax on food for two years — a move that could reduce government revenue and has already contributed to volatility in Japanese bond markets.

Finance Minister Satsuki Katayama downplayed debt concerns and recent currency weakness, suggesting foreign exchange reserves could help fund national spending, though such reserves are typically reserved for currency intervention. She also emphasised close coordination between the government and the Bank of Japan, which appears to have eased market anxiety for now.

What Does This Mean for Me?

Investors are now watching several key US economic releases delayed by the recent partial government shutdown. The January jobs report is due Wednesday, with expectations for roughly 60,000 new jobs, while Friday’s CPI data is forecast to show inflation cooling to around 2.5%.

Several Federal Reserve officials, including Christopher Waller and Stephen Miran, are scheduled to speak this week, with markets parsing their comments for policy signals. Attention is also on the upcoming leadership transition at the Fed, as Kevin Warsh — nominated by President Donald Trump — is expected to succeed Jerome Powell as Chair in May 2026 pending Senate confirmation. Warsh has historically advocated lower interest rates alongside balance-sheet reduction, positions that markets are watching closely.