Last Sunday, the Japanese Prime Minister achieved the best election result ever for her party. Her party received almost 70% (!!!) of the vote, which, with the exception of constitutional amendments, gives her the power to "rule through". If you were to translate the election result (just for fun) into the German party system, the CDU, FDP and AfD would have received around 90% of the vote and all left-wing parties together around 10% 😂
The Japanese benchmark index Nikkei 225 then reached a new all-time high. It is assumed that the defense and tech industries will be strengthened under her government. It wants to create more national champions and at the same time prioritizes national sovereignty. However, tensions with China's communist dictatorship could increase as, unlike her predecessors, she clearly articulates Japan's interests to the Chinese, which they visibly dislike.
What her economic agenda will look like will probably become clear in the coming weeks to months, but I am convinced that the stock markets will benefit significantly. It will probably be a mixture of tax cuts and targeted industrial policy with a focus on high technology.
All in all, I think Japan has made the right decision to combine technology leadership, national sovereignty and security interests. They now have a strong and stable government for the next few years, from which I think we can expect a lot (also for our portfolio) :)
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