Voting in Japan's general election commenced on February 8, 2026, against a backdrop of mounting economic instability. The yen earlier this week plunged to 157 against the U.S. dollar in Tokyo's forex market – its weakest level since late 2025 – as investors grapple with concerns over Japan's fiscal sustainability and political direction.
Analysts attribute the currency's slide to eroding confidence in policymakers' ability to address mounting public debt, which now exceeds 260% of GDP. "The election outcome will determine whether Japan prioritizes fiscal consolidation or stimulus measures," said economist Haruto Yamamoto, noting that prolonged political ambiguity could delay critical reforms.
With campaigning dominated by debates over energy policy and defense spending, business leaders warn that delayed decision-making may further impact export-dependent industries. The Bank of Japan faces mounting pressure to stabilize markets while maintaining its yield curve control framework.
