JAPAN: MNI Publishes Election Preview
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Japan holds a snap general election for the lower chamber of the National Diet, the House of Representatives, on Sunday, 8 February. The contest comes as part of an effort by Prime Minister Sanae Takaichi to reinforce her position as president of the governing Liberal Democratic Party (LDP) and take advantage of strong personal approval ratings to secure a majority in the lower House. Since winning the LDP presidency and taking over from Shigeru Ishiba, becoming Japan’s first female prime minister in October 2025, Takaichi has pursued a more robust stance in regional foreign policy and advocated for a “responsible proactive fiscal policy”. Markets will be watching the election closely for signs of whether Takaichi emerges emboldened or chastened from taking such a political gamble.
In this Election Preview, we outline the electoral system for the House of Representatives and the main parties contesting the vote, put together a chartpack of relevant opinion polling and predictions market odds, provide analysis of potential post-election scenarios with assigned probabilities, an outlook for the election from a financial market and macro perspective, and a round-up of analyst views on the vote.
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FED FUNDS FUTURES: BLOCK: Feb'26 Fed Funds Sale
- -24,000 FFG6 96.40, post time bid at 1016:08ET, DV01 $999,600.
- The Feb'26 contract trades 96.395 last (-0.010) session low on total volume of 108,898.
GILT AUCTION PREVIEW: On offer next week
The DMO has announced it will be looking to sell GBP900mln of the 1.125% Sep-35 linker (ISIN: GB00BT7HZZ68) at its auction next Tuesday, January 13.
POLITICAL RISK: Congressional Briefings On Venezuela Op. Set For Weds. Morning
Briana Reilly at Punchbowl News posts on X: "Full House briefing on Venezuela operation scheduled for 11:30am [16:30 GMT] tomorrow, sources tell Ally Mutnick and me. Will follow a 10am [15:00 GMT] all-senators briefing."
- Following a 2hr+ classified briefing on Monday evening, the ‘Gang of Eight’, in addition to the chair and ranking members of the House and Senate Armed Services and Foreign Affairs/Relations committees, Republican and Democrat figures had differing opinions on the situation. Speaker Johnson said the operation was not an act of war as there are no US forces in Venezuela and no occupation. Senate Minority Leader Chuck Schumer (D-NY) said the “extensive” briefing raised “far more questions than it answered,” adding “Their plan for the US running Venezuela is vague … based on wishful thinking and unsatisfying”. Speaking on the Senate floor, Schumer said, "The danger in Venezuela is only beginning. Donald Trump has opened a Pandora's box, and things will get out of hand very quickly."
- President Donald Trump, speaking to House GOP lawmakers presently (livestream), says regarding the operation, "they knew we were coming", and that the electricity was cut during the operation.
