Sanae Takaichi’s gamble paid off.

When Japan’s first female prime minister called a snap legislative vote barely three months into her premiership, most observers saw a savvy power play.

Without taking anything away from Takaichi, “savvy” might be overstating the case. Typically, “savvy” denotes shrewdness in the presence of ambiguity. When Takaichi dissolved the lower house of Japan’s parliament late last month, it was glaringly obvious that the composition of the legislature didn’t reflect the level of public support for the Liberal Democratic Party.

As 2026 dawned, Takaichi’s cabinet boasted an approval rating near 65%. That’s sky-high in the era of pervasive public disaffection with “the establishment” in Western politics. (Remember: The term “Western” isn’t just a  geographic term in the post-War, sociopolitical economic context. In that discussion, “Western” includes Japan, Australia, New Zealand and South Korea.)

Takaichi styles herself a kind of bridge between the establishment and ascendant right-wing nationalist populism, but let’s not kid ourselves: LDP is the establishment in Japan. Given lingering inflation angst and still-simmering discontent with anything that can be identified as political “business as usual,” there was no guarantee Takaichi could sustain approval ratings as high as those she enjoyed early this year. In fact, I’d call those ratings wholly unsustainable.

So, as obvious as it was that the lower-house seat count didn’t reflect anything like 65% public approval for Takaichi’s government, it was equally obvious that her government’s early-2026 approval rating represented a “now or never” moment. The snap vote was imperative and the result was a foregone conclusion.

That’s what I meant above when I suggested the term “savvy” gives a little too much credit to Takaichi’s cabinet. They had an opportunity to roll a loaded dice and they took it. As one does. Put another way, the parliamentary election was a referendum on Takaichi, but she already had multiple dress rehearsals via public opinion polling, all of which plainly suggested the verdict was favorable.

Early results from the election, held on Sunday amid snow and ice storms, showed LDP winning 300 seats or more. That’d constitute a veritable landslide. Takaichi only needs 233 for a majority, and depending on how LDP’s coalition partner fares, she could end up with a two-thirds super-majority, paving the way for the unimpeded passage of her economic agenda.

Markets pre-traded an LDP win, it’s just a matter of whether a landslide was priced. Super-long yields are down around 40bps from the panic highs hit last month when Takaichi called the vote. There’s still rampant speculation in the market that Japan’s finance ministry and the US Treasury are prepared to coordinate on yen intervention in the event USDJPY drifts back up to test 160.

Recall that news of the snap vote last month triggered a brutal selloff in JGBs.

Needless to say, the election results presage big spending on the economy and national defense. How Japan intends to fund that is… well, suffice to say whatever Takaichi’s cabinet says about their commitment to budget rectitude should be taken with a grain of salt. Takaichi has two political heroes: Shinzo Abe and Margaret Thatcher. One of those two figures was a budget hawk. The other one was Abe.

“If LDP wins in a landslide, we see the possibility of the Nikkei 225 exceeding 56,000,” JPMorgan said late last week. “After the election, the focus will quickly shift to fiscal policy execution and the government’s approach to balancing stimulus with discipline.”