Bets on Big Takaichi Win Set Japanese Stocks on Path to Rally

Stock investors are positioning for a decisive election victory by Prime Minister Sanae Takaichi this Sunday, betting that a strong mandate will allow her to consolidate power and push through expansive fiscal policies.

Japanese stocks have already outperformed many of their developed-market peers, propelled by a revival of the ‘Takaichi trade,’ after word of surprise elections surfaced in early January. Investors are now snapping up shares expected to benefit as they gauge how far Takaichi can test her spending agenda.