Takaichi landslide victory signals Bitcoin tailwinds... moves begin to cut cryptocurrency taxes by 20%
Takaichi landslide victory signals Bitcoin tailwinds... moves begin to cut cryptocurrency taxes by 20%
Japan’s “Iron Lady,” Prime Minister Sanae Takaichi, has led the Liberal Democratic Party to a historic landslide victory in the general election, signaling a green light for “crypto tax reform” and blockchain-friendly policies. Expectations around “Takaichinomics,” shorthand for the prime minister’s aggressive fiscal stimulus and accommodative monetary stance, have weakened the yen while risk assets, led by Bitcoin (BTC), are cheering.
According to cryptocurrency outlet BeInCrypto on February 8 (local time), the LDP under Prime Minister Takaichi is projected to secure between 274 and 326 of the 465 seats in the House of Representatives. This would mark one of the largest victories in postwar Japanese party history, consolidating her authority and providing a platform to push through economic and regulatory reforms. Markets reacted immediately: the dollar/yen rose 0.2% to 157, while the BTC/JPY pair surged nearly 5%, underscoring renewed investor confidence.
The landslide win is expected to bolster momentum for overhauling Japan’s cryptocurrency taxation regime. Currently, Japan classifies crypto trading profits as miscellaneous income and taxes them at rates of up to 55%, a structure that has driven investors away. Proposals under discussion for fiscal year 2026 include cutting the capital gains tax to around 20%, allowing three-year loss carryforwards, and reclassifying certain digital assets as financial instruments. With Prime Minister Takaichi’s pro-growth stance and cooperation from opposition parties such as the Japan Innovation Party, expectations are rising that these reforms could be realized by 2028.
Prime Minister Takaichi has long supported technological innovation and economic security, aligning her agenda with the advancement of blockchain and Web3. While she did not elevate cryptocurrencies to a central campaign issue, her aggressive fiscal policies—modeled on former Prime Minister Shinzo Abe’s “Abenomics”—are widely seen as creating a favorable environment for risk assets such as Bitcoin and Ethereum (ETH). Japan’s stock market is already hitting record highs, and expectations of expanding market liquidity are stoking investor sentiment under the banner of the so-called “Takaichi trade.”
Concerns remain, however. Japan’s public debt exceeds 250% of GDP, and surging government bond yields continue to fuel anxiety over fiscal sustainability. Experts are watching closely to see whether Prime Minister Takaichi’s commanding election victory leads to even larger stimulus measures or a more cautious approach amid fiscal risks. The policy directions of Finance Minister Katsunobu Kato and Digital Minister Masaki Taira will be key variables determining the pace and scope of crypto reforms.
Nevertheless, ongoing proposals from the Financial Services Agency (FSA) combined with Prime Minister Takaichi’s strong political standing point to a potential turning point for Japan’s digital asset sector. If reforms are successfully implemented, clearer regulatory frameworks, tax incentives, and legal recognition could help Japan build a more innovation-friendly cryptocurrency ecosystem.
*Disclaimer: This article is for investment reference only, and no responsibility is taken for investment losses based on it. The content should be interpreted solely for informational purposes.*
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