Japan Defense Stocks Surge on Takaichi’s LDP Victory and Military Reforms (7012.T, 7011.T)

Japan defense stocks rallied Monday on Prime Minister Sanae Takaichi’s LDP victory, which cleared the path for accelerating defense reforms and potentially revisiting the constitution to permit a formal right to possess a military. Kawasaki Heavy Industries (7012.T) climbed as much as 17% to an intraday high, while IHI (7011.T) and Mitsubishi Heavy Industries rose over 5%. The LDP won a two-thirds majority in the lower house, signaling easier passage of legislation, including looser weapon-export regulations that could expand overseas opportunities for Japanese defense firms. Public support is high, with a Cabinet Office poll showing 45% backing strengthening the Self-Defense Forces. “The super-majority will make constitutional revision—and随之而来的 defense liberalization—more likely, driving positive sentiment for defense names,” said Hiroshi Namioka, chief strategist at T&D Asset Management.