February 10, 2026
Japan election victory provides brief risk sentiment boost after Prime Minister Sanae Takaichi’s decisive win in the snap general election. Markets read the result as stronger backing for aggressive fiscal stimulus, corporate-tax reform and deregulation, which lifted the Nikkei 225 to fresh all-time highs (+3.8% post-election close) and gave a temporary tailwind to risk-sensitive assets, including cryptocurrencies.
With the yen stabilizing in the near term (USD/JPY briefly pushed above 157 before recoiling on suspected intervention), traders have reallocated toward higher-beta assets under what some are already calling the “Takaichi trade”. This guide explains what happened, why the move matters for crypto, how long the risk-on phase might last, and what investors should watch next.
How Japan Election Victory Moved Markets and Risk Sentiment
Sanae Takaichi’s conservative LDP-led coalition secured a comfortable majority, giving the new prime minister a clear mandate to pursue her signature economic platform: large-scale fiscal spending, incentives for strategic sectors (defense, AI, semiconductors, fintech) and a more growth-oriented tax regime.
Immediate market reaction (February 9–10 sessions):
- Nikkei 225 closed at record levels, up ~3.8% on the first full trading day
- Top sectors: defense (+6–9%), technology & semiconductors (+4–7%), real estate & REITs (+3–5%), industrials & construction (+3–4%)
- JGB 10-year yield rose ~8–10 bps on expectations of heavier bond issuance
- Yen weakened initially (USD/JPY +0.9%) then stabilized after rumored BoJ jawboning / intervention
- Regional risk assets followed: Australian ASX 200 +1.4%, South Korean KOSPI +1.7%, crypto majors +2–5% in JPY pairs
BTC/JPY and ETH/JPY rose roughly 4–5% in the hours following the outcome, tracking yen-weakening flows and broader risk-on sentiment across Asia.
Why Fiscal Stimulus & Tax Cuts Lift Crypto Risk Sentiment
Takaichi’s economic vision emphasizes:
- Multi-year supplementary budgets financed via new JGB issuance
- Corporate-tax reductions and investment incentives for high-growth sectors
- Looser fiscal stance even if it means higher debt-to-GDP (already ~255%)
This policy mix reinforces three channels that typically support risk assets, including crypto:
- Longer-term liquidity expectations — more government spending → higher money supply → weaker yen over time → capital seeks higher-yielding / higher-beta assets
- Inflation / reflation narrative — fiscal dominance increases probability of sustained higher inflation → favors hard assets (gold, Bitcoin, real estate) over cash & long-duration bonds
- Carry-trade & speculative flows — weaker yen lowers cost of borrowing in JPY to fund long positions in global risk assets (including crypto perpetuals and altcoin/JPY pairs)
Because crypto remains one of the highest-beta risk assets globally, even modest yen depreciation and liquidity tailwinds can produce outsized moves in BTC/JPY, ETH/JPY and major altcoin pairs during Asia sessions.
Why the Risk-Sentiment Boost May Be Short-Lived
While the initial reaction has been risk-on, several counter-forces could cap or reverse the move:
- Japan’s extreme debt burden — Debt-to-GDP already ~255%; markets will only tolerate so much additional issuance before demanding sharply higher yields (JGB curve steepening risk)
- Yen intervention ceiling — BoJ and Ministry of Finance have repeatedly stepped in above 155–160 USD/JPY; aggressive yen weakness could trigger renewed selling of carry trades
- Global liquidity dominates — Crypto ultimately responds more to U.S. dollar conditions (Fed balance sheet, real yields) than local Japanese policy; any hawkish Fed surprise overrides the Takaichi tailwind
- Implementation risk — Stimulus takes time; coalition infighting or upper-house resistance could dilute the fiscal package
Historical precedent: similar “fiscal-optimism” rallies in Japan (Abenomics 2013, post-COVID stimulus 2021) typically delivered 2–6 weeks of risk-on momentum before macro or intervention forces reasserted control.
What Traders Should Watch Next
- USD/JPY behavior above 157 — any MOF/BoJ verbal or actual intervention
- Nikkei futures overnight — sustained strength keeps risk-on narrative alive
- BTC/JPY & ETH/JPY Asian-session volume — if yen crosses remain bid, crypto usually follows
- First supplementary budget outline (expected late February / early March)
- U.S. macro calendar — February jobs report (Feb 7), CPI (Feb 10–14), Fed speakers
Quick Risk-Sentiment Positioning Ideas on Tapbit
- Sign Up on Tapbit (0% maker fees)
- Deposit USDT or JPY via bank transfer / P2P
- Risk-on continuation: Long BTC/JPY or ETH/JPY perpetuals on yen weakness (20–50x leverage, isolated margin)
- Intervention hedge: Short USD/JPY or long JPY crosses if verbal warnings intensify
- Global macro hedge: Long XAU/USDT perpetuals if risk-off returns
- Risk control: Max 1–2% account risk per trade; trailing stops below recent swing lows
FAQs – Japan Election Victory & Crypto Risk Sentiment (February 2026)
Does Japan election victory support long-term crypto gains?
Near-term yes — fiscal stimulus & weaker yen create liquidity & carry-trade tailwinds. Medium-term uncertain — high debt, intervention risk and global dollar dominance can override local policy effects.
Which crypto pairs benefit most from the “Takaichi trade”?
BTC/JPY, ETH/JPY and major altcoin/JPY pairs usually see the strongest Asia-session moves when yen weakens on stimulus expectations.
How long might the risk-on boost last?
Historical fiscal-optimism rallies in Japan typically last 2–6 weeks before macro or intervention forces reassert control. Watch USD/JPY intervention levels and first budget details.
Conclusion
Japan election victory provides brief risk sentiment boost after Prime Minister Sanae Takaichi’s landslide win. Markets read the result as stronger backing for fiscal stimulus and tax cuts, which lifted Japanese equities to fresh records and gave a temporary tailwind to risk-sensitive assets, including cryptocurrencies. With the yen stabilizing in the short term, traders are watching how long this pro-risk phase lasts amid Japan’s high debt burden and global-liquidity dynamics.
Tapbit offers efficient ways to trade yen crosses, BTC/JPY pairs and broader risk-on themes: 0% maker fees on major pairs, deep liquidity, up to 125x leverage on perpetuals, staking/yield options, and instant fiat ramps. Monitor USD/JPY intervention levels, Nikkei futures, BTC/JPY volume, and upcoming fiscal announcements — the “Takaichi trade” remains one of the clearest near-term liquidity narratives in global markets.
Trade yen weakness & risk-on momentum on Tapbit:
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Disclaimer: Cryptocurrency and forex trading involve significant risk of loss. Prices are highly volatile and can change rapidly. Political outcomes, fiscal policy announcements and central-bank intervention are uncertain and subject to sudden change. This article is for informational purposes only and does not constitute investment advice. Always conduct your own research (DYOR) and never invest more than you can afford to lose completely.
