Tokyo shares jumped more than three percent Tuesday morning on speculation that Prime Minister Sanae Takaichi will call a snap election to capitalise on strong poll numbers.

The Nikkei average rose 3.37 per cent or 1,751.20 points to 53,691.09 in early trade, as the index also played catch-up after a Japanese national holiday and US shares advanced overnight.

Takaichi was appointed Japan’s first female prime minister in October, and her cabinet is enjoying an approval rating of around 70 percent.

However, her ruling bloc only has a slim majority in the powerful lower house of parliament, which hinders its ability to push through her ambitious policy agenda.

“If a lower house election is confirmed, we can anticipate a renewed buying trend,” according to brokerage house Monex.

“That’s because it is significant to have the foundation of the Takaichi administration solidified.”

She is considering dissolving the lower house at the start of a parliament session on January 23, the Yomiuri and Mainichi newspapers reported last week, citing unnamed government sources.

That would mean an election would be “highly likely to be held in early to mid-February, the Yomiuri said.

AFP