Japan: Takaichi Wins Historic Victory, Bitcoin Surges to $72,000

Japan has just experienced a major political earthquake. Sanae Takaichi, nicknamed Japan’s “Iron Lady,” won a historic electoral victory on Sunday, February 8, consolidating her position as Prime Minister with the largest margin since World War II. Markets reacted immediately: Bitcoin surged to $72,000, the Nikkei reached a record 57,000 points, and gold crossed the symbolic $5,000/oz threshold.

But beyond the stock market euphoria, a fiscal revolution for cryptocurrencies is on the horizon. Here’s the breakdown.

An Unprecedented Electoral Victory

Sanae Takaichi’s Liberal Democratic Party (LDP) is expected to win between 274 and 326 of the 465 seats in the lower house, according to projections. This “supermajority” gives her free rein to implement her ambitious economic program.

Takaichi, 65, is often compared to Margaret Thatcher for her governance style. A disciple of former Prime Minister Shinzo Abe, she champions an aggressive economic policy dubbed “Takaichi-nomics,” following in the footsteps of her mentor’s “Abenomics.”

The “Takaichi Trade”: Markets on Fire

The victory announcement triggered a wave of buying across all markets:

• Nikkei 225: +3.4% to 57,000 points, a historic record
• Bitcoin: peaked at $72,000 before stabilizing above $70,000
• BTC/JPY: +5% following the election
• Gold: crossed $5,000/oz for the first time
• US Futures: opened higher

This “Takaichi Trade” reflects anticipation of accommodative monetary policy and a massive $135 billion fiscal stimulus, including infrastructure and tax cuts.

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Crypto Tax Revolution in the Making

This may be the most important news for crypto investors: Japan could finally reform its prohibitive taxation on cryptocurrencies.

The Current System: Up to 55% Taxation

Currently, crypto gains in Japan are taxed as “miscellaneous income” (雑所得, zatsushotoku), with a progressive scale that can reach 55% (45% income tax + 10% local tax). This tax regime, among the heaviest in the world, has pushed many Japanese traders to other jurisdictions.

Expected Reforms for 2026-2028

Under industry pressure and with support from pro-crypto opposition parties, several reforms are being discussed for fiscal year 2026:

• Tax rate reduction: move to approximately 20% (flat tax), aligned with capital gains on securities
• Loss carryforward: ability to carry forward losses for 3 years
• Reclassification: certain digital assets could be recognized as “financial products”

Japan’s Financial Services Agency (FSA) is already working on these proposals. With Takaichi’s supermajority, their adoption could be accelerated by 2028.

Japan, Future Global Web3 Hub?

Beyond taxation, Takaichi has expressed support for innovation technologies, economic security, and Web3 development. Her government could:

• Accelerate stablecoin regulation
• Facilitate tokenization of real assets
• Create a favorable framework for exchanges and blockchain projects

Japan is historically a leader in crypto adoption. Major exchanges like Bitflyer and Coincheck are based there, and the country was the first to recognize Bitcoin as legal tender in 2017.

Washington’s Support

Notably, Takaichi’s victory was praised by the highest US authorities. President Donald Trump congratulated the Prime Minister on Truth Social, while Treasury Secretary Scott Bessent called the victory “historic.”

Takaichi announced a visit to the White House in spring 2026, highlighting the “unlimited potential” of the US-Japan alliance. This proximity could facilitate regulatory coordination on cryptocurrencies between the two powers.

Risks to Watch

Despite the euphoria, uncertainties remain:

• Massive public debt: Japan has debt exceeding 250% of GDP
• Rising bond yields: JGBs (Japanese Government Bonds) have seen their rates climb recently
• Key appointments: Finance Minister Katsunobu Kato, retained in his position, has not shown particular commitment to crypto

The pace and scope of crypto reforms will largely depend on budget trade-offs and the new government’s priorities.