Asahi poll points to Takaichi landslide in Japan election

Japan’s ruling Liberal Democratic Party is heading for a decisive win in next week’s lower-house election, according to an opinion poll published by Asahi Shimbun, a result that would strengthen Prime Minister Sanae Takaichi’s hand and keep the government on an expansionary course of higher spending and tax relief.

The survey suggests the LDP will comfortably clear the 233-seat threshold needed for a majority in the 465-seat chamber, up from its current 198 seats.

If combined with its coalition partner, Japan Innovation Party (Ishin), the governing bloc could reach around 300 seats.

Investors have been watching closely for signs of how firmly Takaichi can press ahead with her “proactive” fiscal agenda.

Keisuke Tsuruta of Mitsubishi UFJ Morgan Stanley Securities said a big win would likely increase market expectations that the prime minister will pursue flagship measures, including a cut to the consumption tax.

Japanese government bond yields climbed on Monday as traders priced in the possibility of an electoral mandate for more stimulus.

The poll also indicates trouble for the biggest opposition force, the Centrist Reform Alliance, which could shed as many as half of its 167 seats.

While Takaichi’s coalition currently maintains a narrow majority in the lower house, it remains short of a majority in the upper house.

Takaichi dissolved parliament last month and called the February 8 snap vote in a bid to secure backing for her plan to reflate the economy through looser fiscal policy.

Markets were rattled last month after she pledged to suspend an 8% levy on food sales for two years, reviving worries about fiscal discipline in a country whose public debt exceeds twice the size of its economy.

Many rival parties have also floated a suspension or reduction of the consumption tax as households face higher living costs.

Reuters