Japan’s PM Takaichi Wins Landslide, Eyes Tax Cuts Amid Market Concerns

Tokyo – Japanese Prime Minister Sanae Takaichi’s Liberal Democratic Party (LDP) secured a historic landslide in Sunday’s general election, strengthening her mandate to implement promised tax cuts and stimulus measures. The victory paves the way for a two-year suspension of the 8% food sales tax, part of Takaichi’s plan to ease household living costs.

Investors, however, remain cautious about how the country will fund the tax cut, which could cost roughly 5 trillion yen ($31.9 billion) annually, prompting a sell-off in government bonds and pressure on the yen. Takaichi has ruled out new debt issuance but has not detailed alternative funding sources, signaling that cross-party debates on social welfare and taxation will follow.

Analysts say her strong mandate could marginalize opposition within her party, allowing Takaichi to push ahead with fiscal expansion, but prolonged uncertainty risks further market volatility. Japanese stocks rose, bonds fell, and the yen recovered some ground following the election results. The premier is expected to hold her first post-election press conference on Monday to outline the next steps.