Spend it if you got it! Or hell, spend it even if you don’t. Lord knows American consumers do.

With voters having made official at the ballot box what they’d already voiced in opinion polling — namely that Sanae Takaichi’s quite popular — Japan’s hard-charging, Trump-approved prime minister will have the legislative support she needs to press ahead with a fiscal program some worry could further imperil the country’s stretched finances.

As discussed here on Sunday, a strong performance from LDP in the February 8 snap vote was a foregone conclusion. But the scope of Takaichi’s lower-house triumph was remarkable even as landslides go.

LDP increased their seat count by 60% to 316. This marks the first time in the post-War era — a period dominated almost exclusively by LDP-led governments — that one party claimed two-thirds of the seats. Takaichi has a super-majority by herself.

Thankfully, JGBs and the yen had already priced the “worst case,” which here just means (more) fiscal profligacy. Japanese yields, which rose dramatically when Takaichi called the vote late last month, were steady Monday as was the yen, which is trading in the long shadow of joint MoF-US Treasury intervention.

Japanese stocks, meanwhile, soared to new records, with the Nikkei up almost 4%, taking its 2026 YTD gains to nearly 11%.

It was two years ago this month when the benchmark finally reclaimed its late-1989 highs. Since then, it’s up another 44% as of Monday.

Obviously, the nationalist, foreign policy hawk in Takaichi will push for more defense spending (defense stocks rallied sharply to start the week) and you’ll hear a lot in the months ahead about state initiatives to bolster industries like semis, which are a national security issue for Japan just as they are for every other nation in the AI era.

The first post-snap vote order of business for Takaichi — who, at least on paper, is now more powerful than her legendary mentor, Shinzo Abe — is convincing investors she’s serious about not leaning too hard into new bond issuance to fund spending or plug holes created by the “temporary” cut to the consumption tax on food. (That tax cut was a key LDP election pledge.)

The situation in Japan’s fraught with irony and contradictions. Disaffection with the LDP in recent years centered in no small part on inflation, which Abe fought so hard to rekindle. Takaichi wants to address voters’ cost of living concerns, but doing so will require fiscal policies which, at least on a textbook read, may be inflationary themselves.

Around 25% of Japanese government spending goes towards debt service payments. Takaichi (not irrationally) reckons one way to address that situation is by engineering rapid growth to mechanically bring down the debt-to-GDP ratio.

But to the extent she needs a meaningful inflation impulse to keep propping up nominal growth, the solution’s also the problem. On Monday, she said her government will “ensure fiscal sustainability by steadily reducing the debt-to-GDP ratio.”