Resolution Criteria

The market resolves based on whether a general election occurs in February 2026 and, if so, the outcome for the LDP's lower house majority:

• No election in February: Market resolves to this option if no general election is held in February 2026. A general election is scheduled to be held in Japan no later than 27 October 2028, so elections can be delayed.

• Election, LDP fail to win majority: Market resolves to this option if an election occurs in February 2026 and the LDP (including coalition partners) wins fewer than 233 seats in the 465-seat lower house.

• Election, LDP win majority: Market resolves to this option if an election occurs in February 2026 and the LDP (including coalition partners) wins 233 or more seats in the 465-seat lower house.

Resolution will be determined by official results from Japan's Ministry of Internal Affairs and Communications.

LDP must hold the majority alone, not through a coalition.

Background

Japanese Prime Minister Sanae Takaichi will tell leaders of her Liberal Democratic Party on Wednesday that she intends to trigger a snap election, senior government and LDP officials said, as the country's first female premier seeks to capitalize on her high public support to restore the party's lower house majority. Prime Minister Sanae Takaichi was considering calling a snap election for 8 or 15 February 2026 to take advantage of strong approval ratings in light of the 2025–2026 China–Japan diplomatic crisis.

The LDP and the JIP hold 230 seats in the Lower House, and with three independents joining, the ruling coalition now holds a slim majority in the 465-seat chamber. Takaichi's approval ratings are at a historic 75%, according to a Nikkei survey, marking the third straight month of ratings above 70%.

Considerations

Constitutional Democratic Party of Japan leader Yoshihiko Noda vowed to oust the ruling coalition in an NHK interview, while raising expectations of an alliance with Komeito, the LDP's former coalition partner. The CDP, Japan's largest opposition party, holds 148 seats in the Lower House, with Komeito controlling 24 seats. The opposition's potential coordination could affect the LDP's ability to secure a majority.