Japanese shares rose to record highs Monday after Prime Minister Sanae Takaichi’s conservatives won a historic election landslide with a projected two-thirds majority.
If confirmed by official results, the outcome puts Japan’s first female premier in a powerful position to stamp her mark on the country of 123 million people over the next four years.
Her agenda includes higher defence spending, potentially changing the constitution, and tougher immigration rules despite a falling population.
The first two make China nervous, and the region will be watching closely to see if she ups or lowers the temperature after enraging Beijing in November with comments about Taiwan.
“I think she is showing strong leadership, but I hope things don’t escalate into a conflict or even war with China,” voter Yoshiko Hide, 52, told AFP.
“The thought that a single statement can change the global situation makes me feel a little uneasy,” the medical industry employee said.
Capitalising on her honeymoon start after becoming Japan’s fifth premier in as many years in October, Takaichi called the snap election last month.
The gamble paid off, with local media reporting that her Liberal Democratic Party (LDP) won around 316 of the 465 seats contested, citing partial results.
That takes the party past the 310-seat threshold needed for a two-thirds majority for the first time in its history.
US President Donald Trump — who is due to host Takaichi next month — congratulated her after an earlier endorsement.
“I wish you Great Success in passing your Conservative, Peace Through Strength Agenda,” Trump wrote on Truth Social.
The president of South Korea, whose relations with Japan have long been dogged by historical issues, congratulated Takaichi and said he hopes “that we will continue to build trust”.
Taiwanese President Lai Ching-te said he hoped the victory would provide “a secure future to Japan and its regional partners.”
A heavy metal drummer in her youth, Takaichi was an admirer of Britain’s “Iron Lady” Margaret Thatcher, and on the ultra-conservative fringe of the LDP when she became party chief.
Takaichi and Lee reportedly took part in a drum session during their summit today, playing BTS’s “Dynamite” and “Golden” from KPop Demon Hunters. pic.twitter.com/IXawJ8AQn7
— 由仁アリン Arin Yuni (@Arin_Yumi) January 13, 2026
Despite being her country’s first woman premier, Takaichi has shown little appetite for framing her leadership around gender in male-dominated Japanese politics.
She has been a hit with voters, especially young ones, with fans lapping up everything from her handbag to her jamming to a K-pop song with South Korea’s president.
But she will have to deliver on the economy to remain popular.
The LDP has governed Japan almost non-stop for decades but shed support in recent elections because of unhappiness about rising prices and corruption.
“With prices rising like this, what matters most to me is what policies they’ll adopt to deal with inflation,” voter Chika Sakamoto, 50, told AFP at a voting station in snowy Tokyo on Sunday.
But helping households could make markets jittery about Japan’s colossal debts, which are more than twice the size of the economy.
This was shown by yields on long-dated Japanese bonds hitting record highs during the election campaign after Takaichi floated suspending a food tax.
Tokyo’s Nikkei index of stocks jumped more than five percent early Monday and closed 3.9 percent higher.
Takaichi reiterated on Sunday her mantra of having a “responsible” fiscal policy but added that she wanted “to build a strong and resilient economy.”
“In reality, the policies of a Takaichi administration are unlikely to curb the inflation that voters expect her to address,” said Tetsuo Kotani at the Japan Institute of International Affairs.
“An income tax hike linked to increased defence spending will also be unavoidable. If these policies lead to a triple decline in stocks, the yen, and government bonds, people’s lives will become even more difficult,” Kotani told AFP.
Before becoming prime minister, Takaichi was seen as a China hawk.
She was a regular visitor to the Yasukuni Shrine, which honours convicted war criminals along with 2.5 million war dead and is seen as a symbol of Japan’s militarist past.
Takaichi said Sunday she aimed to get “proper understanding” from Japan’s neighbours before visiting the site again.
Barely two weeks in office, Takaichi suggested that Japan could intervene militarily if Beijing sought to take self-ruled Taiwan by force.
China, which regards the democratic island as part of its territory and has not ruled out force to annex it, was furious.
Margarita Estevez-Abe at Syracuse University said that Takaichi can afford to dial down tensions now.
“(The) best scenario for Japan is that Takaichi kind of takes a deep breath and focuses on amending the relationship with China,” Estevez-Abe told AFP before the vote.
