Japan’s Stock Market Surges Over 3% on Snap Election Expectations
Prime Minister Sanae Takaichi is planning to dissolve the lower house toward the end of January and call snap elections for February.
Quick overview
- Japan's stock market saw a surge of over 3% as speculation about potential snap elections increased.
- The Nikkei 225 closed at 53,549.16 points, driven by strong buying in technology and industrial sectors.
- Prime Minister Sanae Takaichi is expected to dissolve the lower house and call elections in February, capitalizing on her high approval ratings.
- Wall Street is also experiencing gains ahead of the upcoming U.S. inflation data, with the S&P 500 reaching a new all-time high.
Japan’s stock market jumped more than 3% amid growing expectations that the government could call snap elections.
The Nikkei 225 surged over 3% as investors reacted to speculation that the government may move forward with early elections. The benchmark index closed at 53,549.16 points, up 3.10%, while the broader Topix gained 2.13%, supported by strong buying in major technology and industrial stocks.
According to public broadcaster NHK, Japanese Prime Minister Sanae Takaichi is planning to dissolve the lower house toward the end of January and call snap elections for February—likely on the 8th or 15th—in a bid to capitalize on her high approval ratings and strengthen the stability of the ruling coalition.
Takaichi currently enjoys a historic 75% approval rating, according to a Nikkei poll, prompting markets to price in a potential victory that would ease governance and facilitate the passage of the budget and economic reforms.
Wall Street awaits U.S. inflation data
Major Wall Street indexes are trading higher in early New York sessions, as markets focus on the upcoming release of U.S. inflation data due this Tuesday, amid ongoing global tensions.
In premarket trading, both the S&P 500 and the Dow Jones reached record levels. For the first time, the S&P 500 climbed to 7,000 points, setting a new all-time high.
Investors are closely watching December’s U.S. inflation report, which will provide fresh insight into the future path of interest rates, particularly amid renewed pressure from Donald Trump on Federal Reserve Chair Jerome Powell. This reading will also offer a more complete picture after a previous inflation report was distorted by the government shutdown.
At the same time, global markets are digesting Trump’s announcement that the U.S. will impose a 25% tariff on products from countries that maintain trade relations with Iran, including China, adding another layer of uncertainty to the global outlook.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
