Japan faces the possibility of market instability should this weekend's election lead to a dramatic change in the political landscape, particularly if opposition parties gain influence and push for aggressive tax cuts.
“It’s possible Japan might experience its own triple whammy of market turmoil, perhaps a Japanese version of the ‘Trump crisis’ that occurred in April,” said Hideo Kumano, an economist at Dai-Ichi Life Research Institute, referring to a simultaneous fall of stocks, currencies and bonds.
Some analysts suggest the possibility of market disruption similar to the crisis triggered by economic measures proposed by then-U.K. Prime Minister Liz Truss in 2022.
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