Economy

Japan’ Stocks Expected to Surge After 3-Day Weekend, on Expectations of Lower House Election

Yomiuri Shimbun file photo
The Tokyo Stock Exchange

The Yomiuri Shimbun

15:32 JST, January 11, 2026

Stock prices are expected to rise sharply on the Tokyo Stock Exchange on Tuesday as Prime Minister Sanae Takaichi considers dissolving the House of Representatives. Many believe the ruling bloc will pick up more seats if a snap election is called, allowing Takaichi’s economic policies to gain momentum.

After The Yomiuri Shimbun reported Friday night that Takaichi was considering dissolving the lower house, Nikkei 225 Futures for March delivery on the Osaka Exchange soared as high as 53,860, more than 1,900 points higher than the Nikkei Stock Average’s closing price on the same day. Nikkei futures closed at 53,590 on Saturday morning, raising expectations that the Nikkei average will soar after the three-day weekend.

“A snap election would allow the government to ensure a continuation of its policies, which will also allow companies to invest capital, conduct research and be more active in development,” said Eiji Kinouchi, of Daiwa Securities Co., adding that this would lead to further stock market gains.

On the other hand, the yen is expected to weaken further in foreign exchange and Japanese bonds are expected to see a sell-off due to concerns about the government’s worsening finances. On Friday, the yen weakened to over ¥158 per dollar for the first time in a year on the New York foreign exchange market.

In a lower house election, Takaichi’s ruling Liberal Democratic Party would likely increase its seat count given her administration’s high approval rating in polls by media outlets, according to Masahiro Ichikawa, of Sumitomo Mitsui DS Asset Management Co. He believes the LDP will push for “responsible and proactive public finances” and that this will lead market players to be concerned about worsening finances. “The yen will slowly weaken toward the ¥160 mark per dollar after the three-day weekend,” he said.

Takahide Kiuchi, of Nomura Research Institute, Ltd., suggested “Takaichi’s administration should make clear that it will aim at fiscal consolidation in the medium- to long term, as this will lead to stable prices and stable long-term interest rates, as well as sustainable economic growth.”