In a historic display of market confidence, the Tokyo stock market surged on Monday, February 9, 2026, following a landslide election victory by Prime Minister Sanae Takaichi.
The Nikkei 225 index jumped as much as 5.7%, crossing the 57,000-point threshold for the first time in history to hit an intraday record of 57,337.07. This “Takaichi Rally” follows her Liberal Democratic Party (LDP) securing a two-thirds supermajority in the lower house, providing a powerful mandate for her “big-spending” economic agenda.
The Takaichi Mandate: Pro-Growth Pillars
Investors are betting on a continuation of “Abenomics-style” policies, as Takaichi was a protégé of the late Shinzo Abe. Her 2026–2028 roadmap focuses on aggressive fiscal expansion and technological sovereignty.
Strategic Spending: The market is reacting to pledges for massive government investment in AI, semiconductors, quantum computing, and defense.
Fiscal Support: With a supermajority, Takaichi is expected to push through a delayed budget bill focused on addressing rising living costs and sluggish wages.
Consumption Tax Relief: A campaign promise to temporarily reduce the consumption tax on food has fueled a rally in retail and food-related stocks.
Political Stability: Analysts note that the landslide removes “political ambiguity,” a factor that traders typically price at a premium.
Market Performance Summary (Feb 9, 2026)
| Index / Asset | Performance | Key Driver |
| Nikkei 225 | +3.9% (Closed at 56,363) | Landslide victory; tech and machinery sector surge. |
| Topix | +3.4% (Record High) | Broad optimism across real estate and construction. |
| Japanese Yen | Strengthened (156.71 per USD) | Increased demand for Japanese assets post-election. |
| 10-Year JGB Yield | Rose to 2.27% | Anticipation of higher government borrowing and debt. |
Sector Winners and Emerging Risks
While the headline numbers are record-breaking, the “Takaichi Trade” has created distinct winners and specific long-term concerns for the Japanese economy.
Defense & Aerospace: Stocks like Mitsubishi Heavy and IHI Corp saw gains of over 7% due to Takaichi’s plan to double defense spending to 2% of GDP by 2027.
Technology: Chip-equipment manufacturers led the rally, with several jumping more than 10% on news of government-backed “digital sovereignty” initiatives.
The “Debt Shadow”: Despite the rally, bond markets remain rattled. Japan’s public debt is over twice its GDP, and experts warn that excessive fiscal loosening could lead to a “triple decline” in stocks, the yen, and bonds if inflation remains unchecked.
“Japan just delivered the kind of election result markets instinctively embrace because it removes political ambiguity. The win hands Prime Minister Takaichi freedom of movement.” — Stephen Innes, SPI Asset Management, Feb 2026
