Japanese Prime Minister Fumio Kishida is expected to dissolve the House of Representatives, USD/JPY breaks near one-year high, Nikkei futures surge.

Yomiuri Shimbun reports that Japanese Prime Minister Sanae Takaichi is considering dissolving the House of Representatives at the start of the ordinary Diet session on January 23. The plan points to a general election in early to mid-February. Following the news, Nikkei futures surged sharply, and the yen against the US dollar hit a one-year low, with USD/JPY reaching around 158, an increase of approximately 0.6% to 0.7% in a single day.

Industry analysts interpret that since Takaichi’s cabinet took office in October 2025, support ratings have remained around 70%. She aims to dissolve the House of Representatives while support is still high to proactively launch an election campaign. If Takaichi’s administration wins a majority in the House of Representatives, markets expect this will lead to more aggressive fiscal policies, resulting in a sell-off of the yen. Since taking office, her policy style has been “proactive fiscal policy + tolerating a weaker yen to boost stocks and exports.”

Yomiuri Shimbun: Japanese Prime Minister Sanae Takaichi may dissolve the House of Representatives on January 23

According to reports, Prime Minister Sanae Takaichi has begun evaluating the possibility of dissolving the House of Representatives at the start of the ordinary Diet session on January 23. The timetable for the House election is set for early to mid-February, including options such as “Announcement on January 27 – Voting from February 8” and “Announcement on February 3 – Voting on February 15.” The report states that Takaichi intends to seize the opportunity while her cabinet’s approval rating remains high at around 70%, to initiate an early general election. This move aims to solidify her majority in the House of Representatives and strengthen her political foundation and policy push, especially given the minority status in the House of Councillors.

Market interpretation: Bearish on the yen, bullish on risk assets

Following the news, Japanese stocks and the forex market responded quickly. Nikkei 225 futures surged sharply during trading. Market analysts interpret that if Takaichi secures a strong public mandate through the election, it will favor continued loose fiscal, security, and industrial investment policies, which are positive factors for risk assets.

However, the yen faced clear selling pressure. In New York forex trading, USD/JPY increased to about 0.6% to 0.7%, briefly breaking the 158 level and reaching approximately 158.03 yen, a near one-year high.

This article, “Japanese Prime Minister Sanae Takaichi Rumored to Dissolve the House of Representatives, USD/JPY Breaks Near One-Year High, Nikkei Futures Surge,” first appeared on Chain News ABMedia.