日本政局动荡给经济带来更多不确定性

Core Viewpoint - The political turmoil in Japan, marked by Prime Minister Kishi's decision to dissolve the House of Representatives, is creating significant economic uncertainty, impacting capital markets and delaying critical legislative processes [1][2]. Group 1: Political Developments - Prime Minister Kishi announced the dissolution of the House of Representatives on January 19, with elections scheduled for October 2024, raising concerns about the stability of the government [1][4]. - The ruling Liberal Democratic Party (LDP) currently does not hold a majority in the House, leading to fears that a potential victory could exacerbate aggressive fiscal policies [2][4]. Group 2: Market Reactions - Following the announcement, there was a notable sell-off in the Tokyo bond market, with the yield on newly issued 10-year government bonds reaching 2.23%, the highest level since February 1999 [1][4]. - The Japanese yen depreciated sharply against the US dollar, hitting a low of 159.45 yen, prompting intervention from the Finance Minister to stabilize the currency [1][4]. Group 3: Economic Implications - The rise in long-term interest rates above 2% is expected to increase corporate financing costs, negatively affecting economic recovery [2][4]. - The dissolution of the House of Representatives is likely to delay the approval of the new fiscal year's budget and tax reforms, which could impact public services and consumer spending starting from April 1, 2026 [5]. - A budget of 617.4 billion yen has been allocated to expand high school tuition subsidies, but its implementation is uncertain if the budget is not approved in time [5].