Japanese equity markets soared to unprecedented levels on Wednesday, amid rising speculation that Prime Minister Sanae Takaichi could call for a snap general election as early as February. Market optimism was fueled by reports that Takaichi, who has yet to face the electorate as premier, is weighing plans to dissolve the House of Representatives.
The Nikkei 225 advanced 1.6% during morning trading, touching an all-time peak of 54,447, extending Tuesday’s more than 3% rally. The broader Topix index recorded a gain of 0.87% and also achieved a new record, underscoring investor enthusiasm.
Meanwhile, the yen weakened beyond 159 per US dollar, its lowest point since July 2024, a period marked by government intervention to curb the currency’s depreciation.
Sources familiar with the matter indicated that Takaichi may inform senior members of the ruling Liberal Democratic Party (LDP) on Wednesday afternoon of her intention to dissolve parliament’s lower house. According to LDP officials cited by the sources, the dissolution could occur at the start of the ordinary Diet session on January 23.
The same officials noted that the official campaign for the anticipated general election would begin January 27, with voting tentatively scheduled for February 8.
