Japan Snap Election Looms as Takaichi's Ratings Soar

Isaac Bennett

Remarks of Officials

Forex

Economic

Political

Summary:

Japan's LDP eyes an early election, banking on PM Takaichi's popularity to solidify power amid economic headwinds.

Japan’s ruling Liberal Democratic Party (LDP) is reportedly preparing to dissolve the Lower House for a snap election, potentially as early as February. This strategic move appears designed to leverage Prime Minister Sanae Takaichi's remarkably high public approval ratings and solidify the LDP's grip on power.

Prime Minister Sanae Takaichi's high approval ratings are fueling speculation of a snap election in Japan.

LDP Aims to Capitalize on Takaichi's Popularity

According to public broadcaster NHK, preparations are already underway, with the Ministry of Internal Affairs and Communications instructing prefectural election boards to get ready for a possible general election.

The timing is driven by Prime Minister Takaichi's strong public standing. A Nikkei survey puts her approval rating at a historic 75%, marking the third consecutive month it has stayed above the 70% threshold. This popularity persists even as her government navigates a diplomatic dispute with Beijing, sparked by her November comments suggesting Japan's Self-Defense Forces might intervene in response to Chinese military action against Taiwan.

If called in February, the election would occur just four months into Takaichi's term. It would also be the first national test for the LDP's new coalition with its junior partner, the Japan Innovation Party (JIP). Speaking to Takaichi, JIP leader Hirofumi Yoshimura noted that the prime minister's perspective on the election's timing has shifted to a "new stage," signaling that discussions are advancing.

A Fragile Hold on the Diet

While Takaichi's personal ratings are high, her coalition's control over the legislature is thin. The LDP and JIP, along with three independents, hold 233 seats—a slim majority in the 465-seat Lower House.

The situation is more challenging in the Upper House, where the coalition is in the minority with only 119 of the 250 seats. A successful snap election could strengthen the coalition's mandate and provide a more stable foundation for its policy agenda.

Opposition Parties Sense an Opportunity

The opposition is gearing up for a fight. Yoshihiko Noda, leader of the Constitutional Democratic Party of Japan (CDP), the country's largest opposition party, has vowed to oust the ruling coalition.

The CDP currently holds 148 seats in the Lower House and is reportedly exploring an alliance with Komeito, the LDP's former coalition partner. Komeito, which controls 24 seats, broke its long-standing partnership with the LDP in October 2025 during Takaichi's run for prime minister, citing "illegal political financing practices" within the LDP. The LDP-Komeito alliance had been a cornerstone of Japanese politics since 1999.

Economic Headwinds Challenge the Government

Despite her political strength, Prime Minister Takaichi faces a complex set of economic challenges that could become central issues in an election campaign. Key concerns include:

• A Weakening Yen: The Japanese yen has fallen to its weakest level against the dollar in a year, recently hitting 158.19.

• Persistent Inflation: Consumer inflation has remained above the Bank of Japan's target for 44 consecutive months, putting pressure on households.

• Economic Contraction: Revised GDP figures for the third quarter revealed that the economy shrank by 0.6% quarter-on-quarter and 2.3% on an annualized basis, a deeper contraction than initially estimated.

To stay updated on all economic events of today, please check out our Economic calendar

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Political

Widespread Unrest and Mounting Civilian Deaths

Iran’s internal crisis has intensified dramatically, with more than 544 confirmed deaths and over 10,000 individuals imprisoned since protests erupted nearly three weeks ago. The unrest, recorded across all 31 provinces and 186 cities, now represents one of the most significant threats to the current regime in over a decade. These figures, provided by the U.S.-based Human Rights Activists News Agency, indicate the extraordinary scale of the movement, though precise data remains difficult to verify due to ongoing state-enforced communication blackouts.

The regime’s response has included heavy-handed crackdowns and a nationwide restriction of internet and phone access. The dramatic collapse in digital connectivity reportedly down to just 1% of standard levels has not only curtailed global visibility into the unrest but also attempted to silence dissent. Yet, demonstrators persist. In defiance of warnings, hundreds of thousands continue to gather in public spaces, many flashing mobile lights in darkened streets while chanting against Supreme Leader Ayatollah Ali Khamenei.

The communication blackout, although intended as a tool of suppression, is a correlated not necessarily causal factor in the protestors’ resilience. Rather than dissuading mobilization, these restrictions may have reinforced the sense of oppression fueling public anger.

International Involvement and Strategic Uncertainty

President Donald Trump has stated that U.S. military leaders are examining a “range of strong options” for responding to Iranian actions, including the possibility of direct strikes. The President also signaled potential support in restoring internet access via Elon Musk’s Starlink satellite system. While this remains a speculative solution, it reflects the growing entanglement of geopolitical and technological actors in the evolving conflict.

Iranian leaders have framed the crisis as foreign-instigated, with President Masoud Pezeshkian accusing the U.S. and Israel of introducing “terrorists” who allegedly committed extreme violence, including arson and executions. These claims, absent independent verification, appear to serve a narrative aimed at delegitimizing grassroots anger by externalizing blame.

Parliament Speaker Mohammad Bagher Ghalibaf extended the warning further, suggesting Iran may preemptively target U.S. and Israeli military assets if provoked. This rhetoric underscores a causally significant escalation in Iran’s posture, potentially inviting further international tension.

Contrasting Leadership Responses: Condolences vs. Threats

While Pezeshkian offered public condolences and vague promises of reform during a televised interview, no concrete measures were outlined. His conciliatory tone diverged sharply from the militaristic statements of other officials. This internal discrepancy suggests a lack of strategic consensus within the regime, which may further exacerbate public distrust and confusion.

Meanwhile, exiled opposition figures such as Reza Pahlavi, son of Iran’s former shah, have encouraged sustained strikes and occupations of city centers. His advocacy for seizing this moment to “liberate” Iran from authoritarian control marks a symbolic push for regime change, albeit without a clearly defined alternative leadership structure.

Unverified Footage and Human Cost

Despite digital suppression, disturbing images have surfaced online. Videos from Tehran reportedly show families searching through rows of body bags in makeshift morgues. Other scenes reveal torchlit protests, burned-out government buildings, and city-wide blackouts. Though these visuals remain unverified by independent sources like Bloomberg, they serve as visceral testimonies of a nation in crisis.

The developments in Iran reflect a complex interplay of domestic dissatisfaction, authoritarian resistance, and international pressure. While the protest movement has demonstrated remarkable endurance despite brutal crackdowns and information suppression, it remains uncertain whether this upheaval will culminate in reform, regime change, or further repression.

The factors influencing this crisis digital censorship, military rhetoric, foreign policy narratives, and grassroots mobilization are intertwined through both causal and correlational relationships. Any external intervention, whether military or technological, may radically shift the trajectory, but the human toll continues to mount regardless.

In the coming days, how the U.S., Israel, and internal Iranian factions navigate these pressures will determine whether the unrest evolves into a turning point in Iranian history or sinks further into violent stalemate.

Source: Bloomberg

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Isaac Bennett

Remarks of Officials

Energy

Economic

Political

President Donald Trump has suggested he may exclude Exxon Mobil from a U.S.-led initiative to rebuild Venezuela's oil industry, citing his dissatisfaction with the company's cautious approach.

"I'd probably be inclined to keep Exxon out," Trump told reporters Sunday aboard Air Force One. "I didn't like their response. They're playing too cute."

The president's comments appear to stem from a White House meeting on Friday where Exxon's Chief Executive Officer, Darren Woods, expressed significant reservations about the plan.

Exxon's Skepticism at White House Meeting

During the meeting with nearly 20 oil industry executives, Woods reportedly described Venezuela as "uninvestable." This skeptical assessment stands in contrast to the president's ambitious push to reconstruct the nation's energy sector following the capture of former President Nicolás Maduro.

Woods’s caution is rooted in Exxon's past experiences. The company has had its assets seized by the Venezuelan government twice and ultimately left the country after its operations were nationalized in the mid-2000s under President Hugo Chávez.

"If we look at the legal and commercial constructs and frameworks in place today in Venezuela today, it's uninvestable," Woods stated at the meeting. However, he added that Exxon would be ready "to put a team on the ground" if it received an invitation from the Venezuelan government along with adequate security guarantees.

The Challenge of Venezuelan Reinvestment

Reviving Venezuela's oil sector after years of mismanagement and underinvestment is a monumental task. Estimates suggest it could require $100 billion and take a full decade to complete.

Despite recent U.S. actions to control Venezuelan oil exports, significant questions remain about how long-term investments can be protected in a country plagued by corruption and instability. When asked what guarantees he offered the oil companies, Trump said, "Guarantees that they're going to be safe, that there's going to be no problem. And there won't be."

It remains unclear how the president might formally exclude Exxon from any future plans. The company did not immediately provide a comment.

Competitors Signal a Different Approach

While other executives at the meeting also expressed caution, some were more optimistic about the opportunity in Venezuela.

Chevron, Exxon's largest U.S. competitor, has maintained operations in the country. Vice Chairman Mark Nelson told attendees that Chevron is prepared to increase its output from the current 240,000 barrels per day. He projected that production could rise by approximately 50% within the next 18 to 24 months.

Similarly, Josu Jon Imaz San Miguel, CEO of the Spanish company Repsol, said his firm was "ready to invest more in Venezuela today" once the necessary legal and commercial frameworks are established.

To stay updated on all economic events of today, please check out our Economic calendar

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Economic

Commodity

Japan’s Deep-Sea Gamble: Sourcing Rare Earths from the Ocean Floor

In a major strategic move to lessen its dependence on China for critical minerals, Japan has launched the Chikyu, a mining test vessel, on a month-long mission to extract rare-earth-rich mud from the deep-sea floor near Minamitori Island, located 1,900 km southeast of Tokyo. This mission is the first in the world to attempt continuous lifting of rare-earth sludge from a depth of 6 km onto a vessel, showcasing Japan’s ambition to become self-sufficient in a resource it currently imports predominantly from China.

Shoichi Ishii, head of the government-backed project, emphasized that building a domestic supply chain is key to safeguarding Japanese industry, which relies on rare earths for manufacturing cars, smartphones, and defense technologies.

Rising Pressures from China Spark Urgency

The urgency of this mission is underscored by recent developments: China has reportedly broadened its rare-earth export restrictions to Japan, following a ban on dual-use items that serve both civilian and military purposes. Although China hasn’t officially confirmed the broader ban, state media have suggested Beijing is considering it. These actions echo the 2010 rare-earth standoff, when China halted exports to Japan following a maritime dispute an event that served as a wake-up call for Japanese policymakers.

In response, Japan has already reduced its dependence on Chinese rare earths from 90% in 2010 to about 60% today, through efforts such as investments in Australia’s Lynas Rare Earths via trading house Sojitz, and initiatives promoting recycling and alternative manufacturing processes.

Minamitori Island: A Strategic Shift Toward Domestic Supply

The Minamitori operation symbolizes a new frontier. Unlike previous efforts focusing on overseas partnerships, this project targets rare-earth self-reliance by tapping into Japan’s exclusive economic zone. While Japan holds the rights to these resources, technical and environmental challenges remain.

According to Takahide Kiuchi of the Nomura Research Institute, this project is a necessary step but unlikely to fully insulate Japan from supply risks in the short term:

“If this new round of export controls ends up covering a lot of rare earths, Japanese companies will again make efforts to move away from China, but I don’t think it will be easy,” Kiuchi noted.

G7 and Global Strategic Implications

Japan’s move is also gaining attention internationally. Finance ministers from the G7 industrial nations are expected to discuss rare-earth supply chain diversification in Washington, highlighting the global significance of resource security amid escalating China-U.S.-Japan tensions.

As China continues to leverage its dominance over rare earths as a geopolitical tool, Japan’s deep-sea expedition near Minamitori represents a critical pivot point not just for Tokyo’s industrial resilience, but also for how democratic nations will secure vital resources in a fracturing global trade system.

Source: Reuters

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James Riley

Remarks of Officials

Economic

Central Bank

Political

Federal Reserve Chair Jerome Powell has accused the Trump administration of launching a criminal investigation into his conduct as a direct assault on the central bank's political independence.

In a statement on Sunday, Powell asserted that the probe is a retaliatory measure for the Federal Reserve’s decisions on interest rates. "The charges are a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," he said.

Details of the Criminal Investigation

The US attorney for Washington, D.C., opened a criminal investigation into Powell on Friday, The New York Times reported. The inquiry centers on two main points:

• The renovation of the Federal Reserve's headquarters.

• Whether Powell misled Congress about the scale of the construction project.

A Fight Over Monetary Policy

Powell, whose term as Fed chair is set to end in May, framed the investigation as a pivotal moment for the future of American monetary policy.

He argued the core issue "is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation."

A History of White House Pressure

The investigation follows a prolonged period of public criticism from President Donald Trump, who has consistently attacked Powell and the Federal Reserve for not cutting interest rates as he demanded.

The President has previously threatened legal action over the Fed building's renovations and has openly stated his intention to fire Powell. In a related move, Trump fired Fed governor Lisa Cook amid accusations of mortgage fraud, though the Supreme Court later blocked her removal.

Succession Looms as Term End Nears

With Powell's term concluding, the Trump administration has already assembled a list of potential loyalist candidates to lead the central bank, many of whom are expected to favor lower interest rates.

Kevin Hassett, a key economic adviser to Trump, is widely seen as the leading candidate to replace Powell. Despite this, Hassett has stated that the President's opinions on interest rates would hold "no weight" on the agency's decisions if he were in charge.

To stay updated on all economic events of today, please check out our Economic calendar

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Economic

Commodity

Record Gold Rally Amid Political and Geopolitical Stress

Global gold prices climbed sharply to record highs on Monday as investors sought refuge from mounting uncertainty in both U.S. domestic politics and global geopolitics. Bloomberg reports that bullion approached $4,600 per ounce, driven by safe‑haven demand after revelations that the U.S. Justice Department had issued grand jury subpoenas to Federal Reserve Chair Jerome Powell over his congressional testimony, a development seen as a significant escalation in tensions between President Trump’s administration and the Fed.

At the same time, intensifying protests in Iran kept geopolitical risk elevated, adding to the appeal of precious metals. Market participants are pricing in risks from potential regime instability in Iran and its implications for regional security and energy markets, amplifying gold’s traditional role as a hedge against uncertainty.

Weak Dollar and Broader Precious Metals Strength

The surge in gold was accompanied by a weaker U.S. dollar, which fell nearly 0.3%, making dollar‑denominated gold more attractive to foreign buyers. U.S. stock futures also weakened, and government bond futures rallied as traders repositioned for risk‑off sentiment. Silver similarly jumped, trading close to all‑time peaks, while platinum and palladium also advanced.

Analysts note that the combination of political friction particularly threats against central bank independence and ongoing geopolitical strife creates a potent backdrop for precious metals. Charu Chanana, a strategist at Saxo Markets, emphasized the layered uncertainties markets are balancing, from institutional risk and rate debates to headline‑driven volatility.

Structural Drivers and Continued Momentum

Gold’s recent uptrend was not an isolated move. Prices have already experienced unprecedented record breaks in 2025 as markets grappled with expectations of rate cuts by the Federal Reserve, increased central bank purchases, and persistent geopolitical risks, including conflicts and sanctions.

Looking ahead, some forecasts indicate that structural factors such as persistent safe‑haven demand, continued monetary easing, and sustained geopolitical uncertainty could support further upside for gold prices through 2026.

In summary, the latest surge in gold reflects a convergence of monetary policy uncertainty, geopolitical instability, and risk‑off investment behavior, driving bullion to historic highs as a hedge in turbulent conditions.

Source: Bloomberg

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Isaac Bennett

Middle East Situation

Remarks of Officials

Political

President Donald Trump is considering a partnership with Elon Musk's SpaceX to counter Iran's ongoing internet shutdown.

U.S. President Donald Trump announced on Sunday that he intends to speak with billionaire Elon Musk about using his satellite technology to restore internet access in Iran, where a government-imposed blackout has stifled communication for four days amid widespread protests.

"He's very good at that kind of thing, he's got a very good company," Trump told reporters when asked about engaging Musk's company, SpaceX. The firm's Starlink satellite internet service has previously been used to bypass government restrictions in Iran.

As of the announcement, neither Musk nor SpaceX had commented on the potential collaboration.

A Complex Relationship: Trump and Musk Reconnect

The potential partnership comes as Trump and Musk appear to be rekindling a complex relationship. After initially helping fund Trump's winning presidential campaign and later orchestrating major cuts to the federal government, the two had a public falling-out last year when Musk opposed Trump's signature tax bill.

Recent events suggest a thaw in their relations. Trump and Musk were seen dining together at the Mar-a-Lago resort this month, and Secretary of Defense Pete Hegseth is scheduled to visit a SpaceX facility in Texas on Monday.

Starlink's Role in Global Conflicts

Using Starlink to provide internet to Iranians is not a new concept. Musk has previously supported the idea to help citizens circumvent government censorship, including during major protests in 2022. That year, following the death of 22-year-old Mahsa Amini in police custody, the Biden White House engaged with Musk to facilitate the use of Starlink in Iran.

The satellite service has also played a crucial role in other geopolitical hotspots, most notably Ukraine. However, its deployment is not without controversy. In 2022, Musk reportedly ordered a shutdown of Starlink service during a critical Ukrainian military offensive.

Unrest and Information Control in Iran

The current wave of anti-government protests in Iran, described as the most significant since 2022, began on December 28. Initially sparked by soaring prices, the demonstrations quickly escalated into a direct challenge against the clerical rulers who have governed the country since the 1979 Islamic Revolution.

The government's response has included a near-total internet blackout, severely hampering the flow of information. Human rights groups estimate hundreds have been killed in the crackdown. The U.S.-based organization HRANA has reported specific figures from the two weeks of unrest, including:

• 490 protesters killed

• 48 security personnel killed

• Over 10,600 people arrested

The Iranian government has not released an official death toll, and Reuters was unable to independently verify these numbers.

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