About this Market

Sanae Takaichi became Japan’s prime minister in late 2025 and held her first in-person meeting with Xi Jinping on the margins of the October 31 APEC summit in South Korea, where the leaders reaffirmed pursuit of a mutually beneficial strategic relationship. Subsequent remarks by Takaichi linking a Taiwan contingency to Japan’s security legislation triggered a diplomatic crisis, prompting Chinese economic and diplomatic countermeasures that persisted into 2026. Takaichi’s Liberal Democratic Party secured a strong electoral mandate in early 2026, reinforcing her stance amid continued bilateral friction over security, Taiwan, and economic coercion. Xi’s criticism of Takaichi during his May 2026 summit with the U.S. president further highlighted Beijing’s concerns about Japanese defense policy. These developments, alongside scheduled multilateral forums, shape trader assessments of prospects for additional high-level contact within any given resolution window.