Japanese stocks surged to a record high as markets opened on Monday morning, as Prime Minister Sanae Takaichi's Liberal Democratic Party (LDP) basked in a historic election victory.
The LDP secured 316 out of 465 seats in Sunday's election, marking the first time a single party has won a two-thirds lower house majority since Japan's parliament was established in its current form in 1947.
The Japan Innovation Party, a coalition partner of the LDP, won in 36 more constituencies, bringing their combined total to 352 seats.
The resounding mandate is a gamble that paid off for Takaichi, who now faces the challenge of reviving Japan's moribund economy and tackling cost-of-living woes.
The Nikkei index rallied by more than 5% in early trade on Monday, briefly crossing the 57,000 mark for the first time.
Takaichi's decisive win will help her advance pro-business policies without extensive negotiations with opposition parties.
In a statement to reporters, Takaichi expressed her commitment to pursue a responsible yet aggressive fiscal policy, indicating she would not reshuffle the Cabinet formed less than four months ago.
Japan's first female prime minister called the snap election last month, just a few months after taking office in October, achieving a remarkable turnaround compared to her predecessors who lost the party's parliamentary majority amid scandals.
Market commentators believe Takaichi's economic policies could uplift Japan, with her planned stimulus, tax tweaks, and deregulation likely to fuel the existing bullish market trend.
Voters expressed concerns about rising costs of groceries and rent, highlighting the pressure the economy faces from an ageing population and rising social care costs.
Takaichi's pledge to cut taxes and increase spending raises questions about funding, particularly with Japan's high government debt. Critics warn this approach could destabilize the fragile economy.
As Takaichi acknowledged the responsibility to fulfill campaign pledges, she emphasized the need for focus and determination.
Notably, Takaichi has garnered support from younger voters, diverging from traditional conservative bases by introducing elements like fashionable handbags into the political sphere.
U.S. President Donald Trump congratulated Takaichi, reaffirming his support for Japan's people and their enthusiastic voting.
Takaichi is expected to meet with Trump in Washington in March, continuing her international diplomatic engagements.
