Japan’s Nikkei 225 hit a record on February 9, 2026. Investors responded to Prime Minister Sanae Takaichi’s snap election landslide. The benchmark rose about 3.9% and closed at 56,363.94 after briefly trading above 57,000.
Takaichi’s Liberal Democratic Party won 316 of 465 seats in the lower house. With its coalition partner, the Japan Innovation Party, the bloc reached a two-thirds supermajority. That result strengthens the government’s ability to pass legislation.
Markets treated the vote as a reduction in political risk. Traders priced in policy continuity and a faster pace of economic measures. Stephen Innes of SPI Asset Management said a strong mandate can support a “domestic confidence bid” that large investors can justify.
The rally spread beyond Japanese equities. South Korea’s Kospi gained more than 4%, while China’s CSI 300 advanced around 1.6%. Hong Kong’s Hang Seng also rose close to 2% in the risk-on move.
Investors now focus on Takaichi’s economic agenda. It includes a ¥21 trillion stimulus plan and a pledge to suspend the 8% consumption tax on food for two years. Those proposals could support household spending in the near term.
Bond markets reacted as traders assessed funding needs. The benchmark 10-year Japanese government bond yield rose to around 2.28% in reports on the day. Higher yields can raise debt-service costs for the government. They can also influence equity sector leadership.
Currency trading showed volatility early, then steadier moves later. The yen strengthened after an earlier decline, as investors weighed growth support against fiscal risks. Analysts have warned that markets can restrain policy if investors see a widening deficit path.
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Some investors describe the setup as a “Japan is back” trade. The idea combines political stability, pro-growth policy signals, and renewed global interest in Japanese assets. That mix tends to lift equities while it pushes yields higher.
Sector performance will matter in the next phase. Market reports noted leadership from technology and machinery names during the record session. Investors also expect government priorities to influence defence, industrial, and strategic supply-chain themes.
Traders will watch upcoming policy details, including timing and funding. They will also track bond market stability.
A calm rates backdrop could support a broader equity advance, while renewed yield swings could shift the rally into rotation across sectors.