A snap election secures Kaohsiung's Sanae political gamble
2026-01-20 21:57:54
The next House of Representatives election was originally scheduled for October 2028, but Kaohsiung City hopes to use its high approval ratings to reverse the Liberal Democratic Party's recent unfavorable election situation.
When Sanae Kaoichi announced the snap election, she explicitly mentioned "dissolving the House of Representatives" and set the voting day for House members. Her core purpose was to consolidate the ruling coalition's majority in the House of Representatives by re-electing members of the House of Representatives—after all, the House of Representatives controls core powers such as the appointment of the prime minister and budget review.
At a press conference, Sanae Kaoichi stated firmly: "I have staked my prime ministerial career on this election, and I hope that the people will directly decide whether they are willing to entrust me with the governance of the country."
Its core demand is very clear: to take advantage of its current high approval ratings to secure political authorization and clear obstacles for the implementation of subsequent policies.
Sanae Takaichi's personal appeal is unprecedented, as evidenced by multiple polls: a survey by Japan's public broadcaster NHK showed her approval rating at 62%, a poll by Japan News Network showed it as high as 78.1%, and a report by Nikkei Shimbun showed her approval rating at 75%.
In stark contrast, the Liberal Democratic Party, which she leads, has an approval rating of only 29.7%, creating an awkward situation where "the person is popular but the party is not," highlighting a significant disconnect between voters' approval of the prime minister and their support for the ruling party.
The Liberal Democratic Party and its former coalition partner, Komeito, lost their majority in the House of Representatives in October 2024 and their majority in the House of Councillors in July 2025, forcing Takashi to form a fragile alliance with the Japan Restoration Party, which holds similar conservative views.
Even more serious is that the Liberal Democratic Party and its coalition partner, the Japan Restoration Party, together hold 233 seats in the 465-seat House of Representatives. They barely maintain a majority by a single vote with the support of only three independent members, making their ruling foundation extremely weak.
The risks of this early election have increased further due to the complexity of the internal and external environment.
Internally, the opposition parties have completed their consolidation of power, forming a unified opposing camp.
The Liberal Democratic Party is facing scrutiny over political funding scandals and rising prices. An NHK poll shows that 45% of respondents are most concerned about prices, while 16% are focused on foreign policy and national security.
The opposition will criticize Kaohsiung City for dissolving the House of Representatives and holding elections in such a short time, arguing that she acted out of self-interest for the Liberal Democratic Party and her own personal gain.
On January 16, Japan’s largest opposition party, the Constitutional Democratic Party, and the Komeito Party, the former coalition partner of the Liberal Democratic Party for 26 years, officially merged to form the “Centrist Reform Alliance.” They currently control a total of 172 seats in the House of Representatives, enough to rival the ruling coalition, adding a huge variable to the election.
On the external front, against the backdrop of cooling Sino-Japanese relations, Sanae Takaichi may meet with US President Trump as early as March. The outcome of this meeting will directly affect Japan's diplomatic direction, thereby impacting people's livelihoods and public opinion.
Japan's socio-economic order is relatively stable, but populist parties and xenophobic tendencies rose significantly in last year's House of Councillors election.
The further rightward shift and conservatism in mainstream politics, coupled with proactive fiscal policies based on government debt, raises questions about whether Japan can resist the politicization of populism.
Kaohsiung's high approval rating reflects voters' expectations of its leadership rather than their evaluation of its performance in office; the sustainability of its government still needs to be tested by the market and the public.
Kaohsiung plans to promote "diplomacy with middle-power democracies" and establish alliances with European countries and middle powers such as South Korea.
On January 13, 2026, South Korean President Lee Jae-myung will visit Japan. In the coming months, the G7 and NATO summits will also be held, and Kaohsiung hopes to use these occasions to advance its diplomatic agenda.
However, the foundation for improved relations between Japan and South Korea is still fragile, and the shared values claimed by these middle-class democracies often take ambiguous positions on major global issues.
Analysts have presented drastically different predictions for this high-stakes election.
Sam Joachim, an economist at the Swiss private bank EFG, bluntly stated that this is "a high-stakes gamble": "Her personal approval rating is extremely high, but the Liberal Democratic Party itself has weak support and faces a united opposition camp, significantly increasing election uncertainty."
Norihiro Yamaguchi, chief Japan economist at Oxford Economics, also expressed caution. He pointed out that the Komeito Party has a deep foundation in grassroots organization and mobilization, as well as in the integration of constituency resources. The Liberal Democratic Party's many previous election victories relied on its support. Now that it has lost this ally, many Liberal Democratic Party candidates may find themselves in a passive position in the constituency competition.
However, some analysts are optimistic. Jasper Cole, a director of the Monex Group, said that Sanae Takaichi's personal qualities of "starting from scratch and rising against the odds"—coming from an ordinary working-class family, without financial backing or a prominent family background, and reaching the top of power solely through diligence and perseverance—have a strong "inspirational effect" on the Japanese people, especially the younger generation, who are tired of traditional politics.
He believes that the decisive factor in this election will be Sanae Takaichi's personal charisma, rather than the Liberal Democratic Party's economic policies, a factor that could propel the LDP to an overwhelming victory.
For yen traders, the election results will be the core variable reshaping trading logic: if the Liberal Democratic Party (LDP) successfully expands its parliamentary majority, Kaohsiung's position within the LDP will be significantly enhanced, and it will accelerate the implementation of conservative policies. The yen will fluctuate between loose fiscal expectations and tight monetary policy.
A victory in the election will solidify the conservative ruling coalition between the Liberal Democratic Party and the Japan Restoration Party, laying the foundation for future constitutional revision. Takashi hopes to consolidate his domestic political base through the election and demonstrate to the United States his image as a long-term leader, similar to Shinzo Abe 2.0.
If the opposition wins, or the ruling coalition maintains a narrow majority, policy uncertainty will exacerbate market risk aversion and could trigger sharp short-term fluctuations in the yen exchange rate, but this is a low-probability event.
In terms of trend, even though the US dollar index has recorded consecutive sharp declines in the past two trading days, the yen has not appreciated significantly, which means that the pressure for yen depreciation is still very high. Sanae Takashi announced an early election during a period of high popularity, which is a legitimate move to maintain her governing philosophy. This behavior has strengthened the expectation of yen depreciation. However, due to the Japanese government's window guidance every few days, the yen tends to fluctuate around the 160 mark.
From a technical perspective, the USD/JPY pair retraced to the breakout level of 157.89 and is currently trading within an upward channel, in a strong zone above the middle band.
The Japanese yen is expected to continue its depreciation trend along its upward channel, with support at the middle band (the dotted line) and then around 156.52.
(USD/JPY daily chart, source: FX678)
At 21:56 Beijing time, the USD/JPY exchange rate is currently at 157.83/84.
When Sanae Kaoichi announced the snap election, she explicitly mentioned "dissolving the House of Representatives" and set the voting day for House members. Her core purpose was to consolidate the ruling coalition's majority in the House of Representatives by re-electing members of the House of Representatives—after all, the House of Representatives controls core powers such as the appointment of the prime minister and budget review.
At a press conference, Sanae Kaoichi stated firmly: "I have staked my prime ministerial career on this election, and I hope that the people will directly decide whether they are willing to entrust me with the governance of the country."
Its core demand is very clear: to take advantage of its current high approval ratings to secure political authorization and clear obstacles for the implementation of subsequent policies.
Popularity Divide: The Contrast Between High Approval Ratings and Weak Governing Foundation
Sanae Takaichi's personal appeal is unprecedented, as evidenced by multiple polls: a survey by Japan's public broadcaster NHK showed her approval rating at 62%, a poll by Japan News Network showed it as high as 78.1%, and a report by Nikkei Shimbun showed her approval rating at 75%.
In stark contrast, the Liberal Democratic Party, which she leads, has an approval rating of only 29.7%, creating an awkward situation where "the person is popular but the party is not," highlighting a significant disconnect between voters' approval of the prime minister and their support for the ruling party.
The Liberal Democratic Party and its former coalition partner, Komeito, lost their majority in the House of Representatives in October 2024 and their majority in the House of Councillors in July 2025, forcing Takashi to form a fragile alliance with the Japan Restoration Party, which holds similar conservative views.
Even more serious is that the Liberal Democratic Party and its coalition partner, the Japan Restoration Party, together hold 233 seats in the 465-seat House of Representatives. They barely maintain a majority by a single vote with the support of only three independent members, making their ruling foundation extremely weak.
Internal and external pressures: the risks and power struggles behind the election
The risks of this early election have increased further due to the complexity of the internal and external environment.
Internally, the opposition parties have completed their consolidation of power, forming a unified opposing camp.
The Liberal Democratic Party is facing scrutiny over political funding scandals and rising prices. An NHK poll shows that 45% of respondents are most concerned about prices, while 16% are focused on foreign policy and national security.
The opposition will criticize Kaohsiung City for dissolving the House of Representatives and holding elections in such a short time, arguing that she acted out of self-interest for the Liberal Democratic Party and her own personal gain.
On January 16, Japan’s largest opposition party, the Constitutional Democratic Party, and the Komeito Party, the former coalition partner of the Liberal Democratic Party for 26 years, officially merged to form the “Centrist Reform Alliance.” They currently control a total of 172 seats in the House of Representatives, enough to rival the ruling coalition, adding a huge variable to the election.
On the external front, against the backdrop of cooling Sino-Japanese relations, Sanae Takaichi may meet with US President Trump as early as March. The outcome of this meeting will directly affect Japan's diplomatic direction, thereby impacting people's livelihoods and public opinion.
Domestic political and social challenges
Japan's socio-economic order is relatively stable, but populist parties and xenophobic tendencies rose significantly in last year's House of Councillors election.
The further rightward shift and conservatism in mainstream politics, coupled with proactive fiscal policies based on government debt, raises questions about whether Japan can resist the politicization of populism.
Kaohsiung's high approval rating reflects voters' expectations of its leadership rather than their evaluation of its performance in office; the sustainability of its government still needs to be tested by the market and the public.
Alliance of Middle-Class Democratic Nations
Kaohsiung plans to promote "diplomacy with middle-power democracies" and establish alliances with European countries and middle powers such as South Korea.
On January 13, 2026, South Korean President Lee Jae-myung will visit Japan. In the coming months, the G7 and NATO summits will also be held, and Kaohsiung hopes to use these occasions to advance its diplomatic agenda.
However, the foundation for improved relations between Japan and South Korea is still fragile, and the shared values claimed by these middle-class democracies often take ambiguous positions on major global issues.
Election Game: A Dual Approach of Optimism and Caution
Analysts have presented drastically different predictions for this high-stakes election.
Sam Joachim, an economist at the Swiss private bank EFG, bluntly stated that this is "a high-stakes gamble": "Her personal approval rating is extremely high, but the Liberal Democratic Party itself has weak support and faces a united opposition camp, significantly increasing election uncertainty."
Norihiro Yamaguchi, chief Japan economist at Oxford Economics, also expressed caution. He pointed out that the Komeito Party has a deep foundation in grassroots organization and mobilization, as well as in the integration of constituency resources. The Liberal Democratic Party's many previous election victories relied on its support. Now that it has lost this ally, many Liberal Democratic Party candidates may find themselves in a passive position in the constituency competition.
However, some analysts are optimistic. Jasper Cole, a director of the Monex Group, said that Sanae Takaichi's personal qualities of "starting from scratch and rising against the odds"—coming from an ordinary working-class family, without financial backing or a prominent family background, and reaching the top of power solely through diligence and perseverance—have a strong "inspirational effect" on the Japanese people, especially the younger generation, who are tired of traditional politics.
He believes that the decisive factor in this election will be Sanae Takaichi's personal charisma, rather than the Liberal Democratic Party's economic policies, a factor that could propel the LDP to an overwhelming victory.
Summary and Technical Analysis:
For yen traders, the election results will be the core variable reshaping trading logic: if the Liberal Democratic Party (LDP) successfully expands its parliamentary majority, Kaohsiung's position within the LDP will be significantly enhanced, and it will accelerate the implementation of conservative policies. The yen will fluctuate between loose fiscal expectations and tight monetary policy.
A victory in the election will solidify the conservative ruling coalition between the Liberal Democratic Party and the Japan Restoration Party, laying the foundation for future constitutional revision. Takashi hopes to consolidate his domestic political base through the election and demonstrate to the United States his image as a long-term leader, similar to Shinzo Abe 2.0.
If the opposition wins, or the ruling coalition maintains a narrow majority, policy uncertainty will exacerbate market risk aversion and could trigger sharp short-term fluctuations in the yen exchange rate, but this is a low-probability event.
In terms of trend, even though the US dollar index has recorded consecutive sharp declines in the past two trading days, the yen has not appreciated significantly, which means that the pressure for yen depreciation is still very high. Sanae Takashi announced an early election during a period of high popularity, which is a legitimate move to maintain her governing philosophy. This behavior has strengthened the expectation of yen depreciation. However, due to the Japanese government's window guidance every few days, the yen tends to fluctuate around the 160 mark.
From a technical perspective, the USD/JPY pair retraced to the breakout level of 157.89 and is currently trading within an upward channel, in a strong zone above the middle band.
The Japanese yen is expected to continue its depreciation trend along its upward channel, with support at the middle band (the dotted line) and then around 156.52.
(USD/JPY daily chart, source: FX678)
At 21:56 Beijing time, the USD/JPY exchange rate is currently at 157.83/84.
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