The uncertainty has triggered a selloff in government bonds and pushed the yen towards historic lows against other currencies. Prolonged uncertainty over funding risks another bond market sell‑off, analysts warn, with investors already sensitive to Japan’s deteriorating fiscal outlook. Worries over fiscal sustainability could also trigger further yen weakness, inflating import prices and broader inflation — potentially diluting the benefit to households from any tax cuts. Shinichi Ichikawa, senior fellow at Pictet Asset Management Japan, said markets may prove Takaichi’s toughest opponent. Well aware of the risks of reigniting a backlash, Takaichi appeared notably sombre in television interviews following the election victory.

Source: The Patriot February 09, 2026 15:18 UTC