Tokyo Stocks Jump Over 3% at Open on Snap Election Speculation

Tokyo shares surged at the open on Tuesday, buoyed by speculation that Japan’s new prime minister may call a snap general election to capitalise on strong public approval ratings.

The benchmark Nikkei 225 jumped 3.37 percent, or 1,751.20 points, to 53,691.09 in early trade, as investors returned after a national holiday and reacted to gains on Wall Street overnight.

Markets were further supported by reports that Prime Minister Sanae Takaichi, appointed in October as Japan’s first woman leader, is considering dissolving the powerful lower house of parliament later this month.

Takaichi’s cabinet is currently enjoying approval ratings of around 70 percent, but her ruling coalition holds only a narrow majority in the lower house, limiting its ability to advance key policy reforms.

“If a lower house election is confirmed, we can anticipate a renewed buying trend,” brokerage firm Monex Group said in a note, adding that a stronger mandate would help stabilise the new administration.

Japanese media reports have suggested the lower house could be dissolved at the start of the next parliamentary session on January 23, potentially paving the way for elections in early to mid-February.