Japanese election results shift power on October 27

On October 27, Japan held a vote for the lower house of its parliament, the National Diet, following a snap election called by newly elected Prime Minister Shigeru Ishiba. He succeeded Fumio Kishida in a bid to solidify his power within the ruling Liberal Democratic Party (LDP). However, reports indicate that the LDP is likely to lose its majority in the 465-seat House of Representatives. This political uncertainty has raised concerns over the governance of Japan, which is the fourth largest economy in the world. Interestingly, despite this instability, the Japanese markets reacted positively during intraday trade on October 28. The Nikkei 225 index experienced a 1.79 percent increase, rising by 679.57 points, reaching a total of 38,593.49 points after a week of decline. Similarly, the Topix Index also saw gains, climbing by 1.52 percent. Experts have noted that the Japanese economy has struggled over the past three decades, largely stagnant since the real estate bubble burst. This has resulted in wages barely increasing, failing to keep up with the rising cost of living. The outcome of the recent elections could potentially bring about changes in this political landscape, either benefitting or further complicating Japan's economic recovery. The ongoing political changes and their implications for the economy are being closely monitored, as they could influence investor confidence and overall market performance in the coming weeks.