Dollar Holds Firm as Markets Weigh Warsh-Led Fed and Yen Weakness Ahead of Japan Election 
BOJ Policymakers Warn Weak Yen Could Fuel Inflation Risks and Delay Rate Action 
U.S. Government Faces Brief Shutdown as Congress Delays Funding Deal 
UK Employers Plan Moderate Pay Rises as Inflation Pressures Ease but Persist 
South Korea Factory Activity Hits 18-Month High as Export Demand Surges 
South Korea Exports Surge in January on AI Chip Demand, Marking Fastest Growth in 4.5 Years 
U.S. Eases Venezuela Oil Sanctions to Boost American Investment After Maduro Ouster 
India Budget 2025 Highlights Manufacturing Push but Falls Short of Market Expectations 
Philippines Manufacturing PMI Hits Nine-Month High Despite Weak Confidence Outlook 
China Home Prices Rise in January as Government Signals Stronger Support for Property Market 
Japan Election Poll Signals Landslide Win for Sanae Takaichi, Raising Fiscal Policy Concerns 
Gold and Silver Prices Plunge as Trump Taps Kevin Warsh for Fed Chair 
EU Recovery Fund Faces Bottlenecks Despite Driving Digital and Green Projects 
Starmer’s China Visit Highlights Western Balancing Act Amid U.S.-China Rivalry 
China Factory Activity Slips in January as Weak Demand Weighs on Growth Outlook 
China Manufacturing PMI Slips Into Contraction in January as Weak Demand Pressures Economy 
IMF Forecasts Global Inflation Decline as Growth Remains Resilient 
Japanese shares are expected to continue breaking records after Sanae Takaichi, known for her pro-stimulus stance, was elected as leader of the ruling Liberal Democratic Party (LDP), positioning her to become Japan’s next prime minister. Takaichi, 64, has long been associated with aggressive fiscal and monetary expansion, drawing comparisons to the late Shinzo Abe’s “Abenomics” policies.
In anticipation of her win, traders positioned for a so-called “Takaichi trade,” going long on equities while shorting Japanese government bonds (JGBs), particularly at the long end of the yield curve. This strategy reflected expectations of higher government spending and looser monetary conditions. The Nikkei benchmark hit a fresh record close of 45,769.50 last Friday, surpassing its previous high as markets priced in dovish leadership. Analysts suggest the index could push toward the 47,000 mark if short-sellers unwind positions.
Meanwhile, Japan’s bond market remains under pressure. Long-term JGB yields surged to record highs in September amid fading demand, reduced central bank support, and concerns about ballooning public debt. The 30-year JGB yield reached 3.285% after former Prime Minister Shigeru Ishiba announced his resignation. Although yields briefly eased when markets expected a moderate successor, Takaichi’s victory is now reigniting worries over expanded government borrowing.
The yen has been volatile, closing at 147.44 per dollar last week with its sharpest weekly gain since May. Analysts caution, however, that Takaichi’s policies may weigh on the currency over time if they delay Bank of Japan (BOJ) rate hikes. BOJ Governor Kazuo Ueda has signaled gradual tightening after years of massive stimulus, but Takaichi’s influence could complicate that path.
Market watchers expect a steeper yield curve ahead—lower short-term yields due to political pressure on the BOJ, paired with higher long-term yields from expanded fiscal spending. For now, equities remain the bright spot, with investors betting Takaichi’s leadership will inject momentum into Japan’s growth story.
