Japanese Prime Minister Sanae Takaichi’s plan to call a snap election jolted the country’s markets, as investors bet on her expansionary fiscal policy.
A conservative who has enjoyed high approval ratings, Takaichi reportedly plans to tell allies on Wednesday that she is eyeing an election in February in a bid to tighten her grip on power.
That reinvigorated the “Takaichi trade,” thanks to expectations that she will have a freer hand to push stimulative measures that could boost defense, AI, and energy sectors: Japanese stocks hit a record high Tuesday. A strong showing could also reduce Takaichi’s vulnerability to domestic pushback as she navigates a diplomatic spat with China, analysts said.