The Japanese House of Representatives election ended with Takaichi's big win, and the ruling coalition now holds enough seats to meet the constitutional amendment threshold. After meeting the threshold, Takaichi's visit to the U.S. on March 19 might lead to substantial progress, with expansionary fiscal policies in the works. In addition to the $300 billion AI investment (7% of GDP), there’s also a 5% defense spending increase on the table. The national debt-to-GDP ratio is expected to gradually expand from 250% to around 280%. There’s no stopping the expansionary fiscal policy, and Japanese government bond yields are likely to keep climbing. We might see the USD/JPY exchange rate jump tomorrow, and imported inflation seems almost unavoidable. The key point is Takaichi’s statement: 'A weak yen has both advantages and disadvantages. We will continue to pursue responsible and proactive fiscal policies. The goal is to build a resilient nation capable of withstanding forex fluctuations.' This line is worth pondering. It seems that even if the USD/JPY exchange rate breaks 160 in the short term, there won’t be frequent or aggressive interventions like in the past (at least not as the first option). Instead, the market will play a bigger role in determining exchange rates, while fiscal policies will be used to cushion the negative impacts. Keep a close eye on the USD/JPY exchange rate and Japanese long-term bond yields. At some point, this trajectory will become unsustainable, and the reversal moment will pose significant risks to the market.