高市“赌赢了”，日元面临进一步下行压力

Core Viewpoint - The recent Japanese House of Representatives election results have solidified the ruling coalition's power, paving the way for Prime Minister Kishi's expansionary fiscal policies, which may negatively impact the country's monetary fundamentals [1][2]. Election Results - The ruling coalition, consisting of the Liberal Democratic Party (LDP) and the Japan Innovation Party, secured a majority in the House of Representatives, with 232 seats out of 465 [2]. - This election marks the first time in 25 years that the LDP has participated without the Komeito party, indicating a significant shift in Japan's political landscape [2]. Fiscal Policy Implications - Kishi has promised to permanently abolish the 8% consumption tax on food, which is a key revenue source for addressing Japan's aging population and supporting social welfare [3]. - The elimination of the food consumption tax is projected to reduce government revenue by approximately 5 trillion yen annually, equivalent to Japan's yearly education expenditure [3]. Market Reactions - Following the election results, there is an expectation of a "Kishi trade," betting on rising Japanese stocks and a weaker yen [4]. - Analysts predict that the Nikkei index could rise by about 2000 yen in response to the election outcome, with initial market reactions indicating a recovery in high-level trading [5]. Currency and Economic Outlook - The election results have reinforced Kishi's strong political position, which may lead to increased fiscal spending, potentially exacerbating Japan's fiscal deficit and negatively affecting the currency's fundamentals [6]. - Despite concerns over the yen's depreciation, there are indications that the currency's movement may not solely depend on fundamentals but also on technical factors and the coordination of monetary policies between Japan and the U.S. [6].