Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Prime Minister Sanae Takaichi has won a stunning landslide in Japan’s snap general election, gaining her governing Liberal Democratic Party a supermajority in parliament’s lower house.
The LDP had won 316 of 465 seats by the early hours of Monday in Tokyo, according to results collated by broadcaster NHK.
The more than two-thirds majority will give the LDP tight control of the lower house and the ability to override Japan’s less powerful upper chamber, where it lacks a majority.
It would also allow a first step towards changing Japan’s constitution, but any amendment would also require a two-thirds majority in the upper house as well as support from voters in a referendum.
Takaichi said in a television interview on Sunday night that the LDP had fought the election on a series of major policy shifts, especially on the economy and tax.
“If we have won the public’s support, then we truly must tackle these issues with all our strength,” she said.
She also signalled that she was ready to put her huge majority to use immediately and would like to see a parliamentary debate on the issue of revising Japan’s 1947 constitution, which has never been amended, potentially including its “peace clause” cherished by advocates of Japanese pacifism.
Takaichi staked her three-month-old premiership on a bet that the country would embrace her bluntly spoken conservatism, promises of a new era of prosperity and expansive spending pledges.
In securing a clear mandate for her leadership, Japan’s first female prime minister has also engineered a stunning comeback for the LDP, which had lost its majority in both houses of parliament.
Exit polls project that the LDP and its coalition partner, the Japan Innovation Party, could win as many as 364 seats between them.
Investors have said the scale of the LDP’s victory would probably reignite the so-called Takaichi trade, which has driven Japan’s stock market to record highs since she became prime minister in October.
Trading in Nikkei 225 futures in the US on Sunday suggested that Japanese stocks would open significantly higher on Monday.
But Takaichi’s pledges of more government spending, and a pre-election pledge to suspend consumption tax on food for two years, have rattled bond markets and sent the yen sharply lower against the US dollar. Some analysts predict the yen could fall further when markets reopen.
Analysts have said the projected victory would give Takaichi clear authority over the LDP, which has a history of internal divisions. She is on track to secure a parliamentary majority that could be larger even than that of the late Shinzo Abe, a hero of hers and Japan’s longest-serving prime minister in the modern era.
Takaichi’s decision to hold the election came at a time of growing economic distress among ordinary Japanese citizens unhappy with rising food prices and stagnant wages.
The worsening geopolitical conditions, combined with growing worries around US commitment to its old alliances, have driven voters towards Takaichi, a nationalist who presents herself as a fierce proponent of Japan on the global stage.
Tobias Harris, a political analyst and founder of Japan Foresight, said Takaichi would feel “vindicated”, adding: “She has ambitions, she’s been given a huge mandate and will likely turn her power against the constraints that remain, such as the ministry of finance.”
The LDP’s success comes at the expense of the recently formed Centrist Reform Alliance bloc, which is projected to have lost about half the seats its members held. The bloc was formed from the Constitutional Democratic Party and the LDP’s former coalition partner, Komeito.
Neil Newman, Japan strategist at Astris Advisory, said the victory meant that the LDP was back in the driving seat and would accelerate investment to support the economy.
“Japan will no longer fear or tolerate Chinese trade threats, but will invest to negate them. As investors we have a whole new Japan to reconsider from Monday,” he added.
Data visualisation by Haohsiang Ko in Hong Kong and Cleve Jones in London