Opposition parties in Japan are speeding up preparations after Prime Minister Takaichi Sanae signaled her intention to dissolve the Lower House early in the Diet session that opens on Friday next week.

Komeito’s decision to sever its alliance with the LDP means the ruling party is expected to forgo millions of votes at the election.

Japan’s PM will next week dissolve the lower house, triggering a national vote to decide all 465 seats. It will be her first electoral test since taking office.

South Korean President Lee Jae Myung departed Seoul on Tuesday for a two-day visit to Japan, where he is scheduled to hold a bilateral summit with Japanese Prime Minister Sanae Takaichi.

The USD/JPY pair trades in a tight range around 158.50 during the Asian trading session on Thursday. The pair consolidates as the upbeat US Dollar (USD) has offset the decent recovery in the Japanese Yen (JPY).

Ian Samson, Portfolio Manager at Fidelity International, discusses the implications of Takaichi's fiscal policy on the back of rising yields and a weaker yen, and shares his outlook for the Chinese markets in 2026.

Expectations are growing for a general election next month that could solidify Prime Minister Sanae Takaichi’s political standing and allow her to take bolder steps to boost the economy.

Japan and South Korea aim to deepen security and economic ties to counter growing tension in East Asia, their leaders said on Tuesday, after a summit meeting in Japan.