Adam had the news on Friday:
More on this, summary:
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LDP lawmakers expect possible Lower House dissolution in late January
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Snap election could be held as early as February
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Takaichi citing inflation relief and economic impact as priorities
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Ruling bloc holds slim Lower House majority, Upper House minority
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Election logistics already being quietly prepared
Speculation is building within Japan’s ruling Liberal Democratic Party that Prime Minister Takaichi Sanae could dissolve the Lower House at the start of the ordinary Diet session later this month, potentially triggering a snap general election as early as February.
A growing number of LDP lawmakers believe the prime minister is inclined to seek a fresh mandate while cabinet approval ratings remain relatively strong. The ordinary Diet session is scheduled to begin on January 23, a timing that would allow an early or mid-February election if the chamber is dissolved promptly.
Asked about the possibility of dissolution, Takaichi said the government’s priority is ensuring households feel the benefits of economic policy and measures aimed at curbing rising prices. She added that the administration is continuing to work on inflation relief and broader economic support, comments widely seen as leaving the election option open.
The Takaichi administration currently holds only a slim majority in the Lower House after three independents joined the LDP bloc, while remaining in the minority in the Upper House. That fragile parliamentary arithmetic has added to expectations that the prime minister may move early rather than risk erosion of political momentum.
LDP policy chief Kobayashi Takayuki said the authority to dissolve the Lower House rests solely with the prime minister, warning lawmakers they should always be prepared “as if on a battlefield.” Similar language has been echoed across both ruling and opposition parties.
Opposition leaders have also begun positioning for an election. Constitutional Democratic Party head Noda Yoshihiko said Takaichi would face scrutiny over whether she is prioritising a political mandate over tackling inflation and economic challenges. Democratic Party for the People leader Tamaki Yuichiro said candidate preparations would be accelerated.
Coalition partner Komeito, however, has urged focus on inflation countermeasures rather than political manoeuvring.
The Internal Affairs Ministry has already instructed prefectural election boards to prepare for a possible vote. Any final decision may hinge on public opinion, upcoming diplomatic engagements with South Korea and Italy, and the impact a snap election could have on deliberations over the fiscal 2026 budget.
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Takaichi’s objective in calling a near-term election would be to secure a stronger governing mandate. For traders and investors, the more immediate implication is the prospect of even greater fiscal support under her administration. The market read is negative for both JGBs and the yen, given Japan’s already extreme public-debt burden and rising debt-servicing costs as the Bank of Japan gradually edges rates higher. Japanese stocks, however, would welcome more fiscal support for the economy and the weaker yen.
The yen weakened last week ahead of Friday’s headlines and has extended those losses since, timing that some in the market may view with raised eyebrows (cough … insider trading … cough).
USD/JPY tip from the boss
