Yen Whipsaws After Takaichi’s Landslide Supermajority Signals Bigger Spending

Markets have seen this movie before: Shinzo Abe’s December 2012 victory (294 seats) unleashed ‘Abenomics’ and a 25 % yen drop within six months, while the 1998 and 2010 Ministry of Finance interventions show Tokyo’s willingness to defend psychological levels when volatility threatens domestic confidence. Takaichi’s mandate fits a decades-long pattern of Japan using fiscal stimulus—financed by the world’s highest debt-to-GDP (≈260 %)—to offset demographic drag, betting that mild inflation and global demand will keep bond yields anchored. Whether this moment is another 2012-style turning point or just a blip hinges on how long investors tolerate bigger deficits before demanding higher yields. On a century horizon, Japan’s struggle—aging society, chronic deflationary impulses, and reliance on currency policy for growth—offers a laboratory for post-industrial economies wrestling with growth without population, making each political reset a small but telling data point rather than a wholesale regime change.