Business & Economics
Yen Whipsaws After Takaichi’s Landslide Supermajority Signals Bigger Spending
Sanae Takaichi’s 9 Feb 2026 lower-house sweep briefly drove USD/JPY to ¥157.72—a two-week low for the yen—before government intervention warnings yanked the pair back below ¥156.
Focusing Facts
- LDP won 328 of 465 seats and, with Ishin, secured a two-thirds lower-house supermajority enabling override of the upper chamber.
- USD/JPY spiked to 157.72 on 9 Feb, then strengthened as much as 0.7 % to 156.56 after top currency diplomat Atsushi Mimura signalled readiness to act.
- The yen remains 6 % weaker than when Takaichi became LDP leader in Oct 2025, underscoring the longer slide despite the post-election bounce.
Context
Markets have seen this movie before: Shinzo Abe’s December 2012 victory (294 seats) unleashed ‘Abenomics’ and a 25 % yen drop within six months, while the 1998 and 2010 Ministry of Finance interventions show Tokyo’s willingness to defend psychological levels when volatility threatens domestic confidence. Takaichi’s mandate fits a decades-long pattern of Japan using fiscal stimulus—financed by the world’s highest debt-to-GDP (≈260 %)—to offset demographic drag, betting that mild inflation and global demand will keep bond yields anchored. Whether this moment is another 2012-style turning point or just a blip hinges on how long investors tolerate bigger deficits before demanding higher yields. On a century horizon, Japan’s struggle—aging society, chronic deflationary impulses, and reliance on currency policy for growth—offers a laboratory for post-industrial economies wrestling with growth without population, making each political reset a small but telling data point rather than a wholesale regime change.
Perspectives
Global financial wire services
Global financial wire services — They frame Sanae Takaichi’s landslide as a green-light for aggressive fiscal stimulus that immediately knocked the yen lower and could keep it under pressure. By centering on risks to Japan’s debt load and quoting FX strategists who predict further yen weakness, these outlets cater to currency traders’ appetite for a bearish yen narrative that reinforces popular carry-trade positioning.
Middle-East market outlets
Middle-East market outlets — They stress that after an early dip the yen rebounded sharply on speculation Tokyo may intervene, portraying the currency as momentarily resilient despite stimulus plans. Highlighting intervention risk warns their regional investor audience against one-way short-yen bets, but may overplay officials’ ability to stem longer-term depreciation to seem prudent and prescient.
Next-day analyst round-ups
Next-day analyst round-ups — They note the yen’s modest post-election gains yet argue it will likely resume weakening once markets digest data and Takaichi unveils looser budgets. This tempered stance lets commentators hedge—acknowledging short-term moves while keeping a prevailing bearish call alive—maintaining credibility whichever way the currency breaks.