FX.co ★ Japanese Shares Fall on Political Uncertainty

Japanese equities experienced a decline for the fourth consecutive session on Tuesday, impacted by political uncertainty that has dampened investor sentiment. The Nikkei 225 index decreased by 1.1%, falling below 53,000, while the broader Topix Index saw a decline of 0.6%, reaching 3,635. This drop followed Prime Minister Sanae Takaichi’s announcement that she would dissolve parliament on Friday and call an early general election. The election, set for February 8, aims to secure voter approval for her spending plans and broader policy agenda. This will also serve as Takaichi’s first electoral challenge since assuming office. Market participants are also anticipating the Bank of Japan’s policy meeting this week, with expectations that interest rates will remain unchanged, though future guidance could hint at potential rate increases later this year. The technology sector was notably affected, with key declines from companies such as SoftBank Group (-2.3%), Disco Corp (-1.1%), Fujikura (-2.9%), Advantest (-1.6%), and Tokyo Electron (-2.1%).