Japan's Nikkei 225 stock index surged to a historic record on Monday, February 9, 2026, breaching the 57,000 level with a 3.4% gain. This dramatic rise followed Prime Minister Sanae Takaichi's decisive "supermajority" victory in a Sunday general election, which gave her ruling Liberal Democratic Party a two-thirds majority. The political mandate is seen as a green light for Takaichi's aggressive expansionary fiscal agenda.
The core of the market euphoria is a promised massive stimulus package. During her campaign, Takaichi pledged to implement tax cuts on food and other items. Her administration had previously rolled out a $175 billion stimulus package, and analysts anticipate she will now have an easier path to inject further funds into the economy, with reports mentioning a potential $135 billion package aimed at infrastructure spending and tax cuts.
The "Takaichi Trade" ignited a global ripple effect beyond equities. The anticipation of significant Japanese government spending and a continued weak yen policy—a hallmark of the late Shinzo Abe's economic strategy which Takaichi has embraced—drove capital into alternative assets. Gold prices soared past the monumental $5,000 per ounce milestone. In the cryptocurrency market, Bitcoin (BTC) was propelled to a brief peak of $72,000 before settling back above $70,000 during Asia morning trading hours.
The rally was further bolstered by international political support. Both former U.S. President Donald Trump and U.S. Treasury Secretary Scott Bessent congratulated Prime Minister Takaichi on her victory. The bullish sentiment mirrored a strong Friday session in U.S. markets, where the Dow Jones Industrial Average (DJI) crossed the 50,000 level for the first time, with Trump reportedly eyeing a 100,000 target for the index.
However, the stimulus-driven strategy carries significant risks. Japan's debt-to-GDP ratio already stands at a staggering 237%, and the proposed tax cuts risk creating a revenue shortfall. This concern was reflected in the simultaneous surge in Japanese government bond yields as investors priced in higher future debt issuance.
