Japan’s election: a gamble with consequences

Insight: Japanese Prime Minister Sanae Takaichi’s decision to call a snap election on February 8, just a few months into her tenure, is a bold bet on her own popularity rather than the more mixed public perceptions of her Liberal Democratic Party (LDP). And her gamble is likely to pay off. Most pundits expect the LDP and its new coalition partner, the economically liberal and reformist Ishin party from Osaka, to regain an outright majority in the Diet’s 465-seat Lower House. In fact, the LDP may even do so on its own — polls suggest it could win 250 or even 300 seats, well above the 233 required. 

Impact: Domestically, voters’ main concerns are familiar: cost-of-living pressures, social security, economic growth and jobs. Takaichi is promising relief on all these fronts and the size of her majority — assuming she wins — will determine how easily she can turn pledges into law. The more she can expand fiscal policy, the greater the likelihood of continued yen weakness and a further rise in government bond yields, not to mention, more gains on the stock market. In foreign policy, the election is effectively a referendum on the prime minister’s move to elevate Japan’s national security and global engagement generally and her more assertive stance on China, specifically. If voters endorse this, it signals they are willing to endure economic pain (in terms of sanctions and export bans imposed by Beijing) to see Japan achieve greater strategic autonomy. So, this is a Japanese election that really matters.

The new US tariff on Indian exports, cut from 50%. While it places India marginally ahead of regional manufacturing rivals — Bangladesh and Vietnam at 20% and China at 34% — the opaque terms underscore how market access is increasingly being by used Washington as geopolitical leverage rather than to create a stable trade framework.

Insight: One year ago, DeepSeek's R1 model shocked the world, matching OpenAI's performance at a fraction of the cost. The breakthrough left many wondering how a small Chinese startup could challenge America’s AI supremacy. At least part of the answer is the depth of China’s talent pipeline, shaped by a decades-old, state-backed “genius class” system. Gifted teenagers are channeled into elite science and math classes with the incentive of bypassing China’s grueling ‘gaokao’ university entrance exams in favor of International Olympiad pathways. Alumni of this system have gone on to build China’s tech giants, from ByteDance and Meituan to Taobao and PDD, while DeepSeek itself reportedly drew over 100 AI researchers almost entirely from these programs.

Impact: The genius class system reflects China’s long-term strategic bet on talent as national infrastructure. The country now graduates around five million STEM students annually — roughly 10 times the US number — and has registered more than 1,000 generative AI models, producing a pipeline of self-directed problem-solvers capable of innovating even under export controls. The trade-off is steep: only about 3% of genius-class students secure direct university admission, with most returning to the gaokao under intense pressure with just a year to prepare. But as US uncertainty pushes Chinese PhD talent home and Beijing elevates AI as a core growth strategy, the question is no longer whether China can compete at the frontier, but how global technology shifts when its leading engineers are trained from adolescence to believe there is no problem they cannot solve.

Insight: In typical Singaporean fashion, the city-state is entering the space race not with rockets or grand missions, but with a checklist. The upcoming launch of the National Space Agency of Singapore is less about going to space and more about making space useful — organizing satellite data, setting guardrails, and establishing partnerships so space technology can support ports, cities, climate monitoring and food security. With the global space economy potentially worth USD 1.8 trillion by 2035, Singapore is betting that pragmatism beats spectacle.  

Impact: This approach reflects a broader shift in how influence will be built in this new market. As access to orbit becomes cheaper and more crowded, advantage is moving away from sheer launch capacity and toward the ability to turn space assets into dependable, everyday infrastructure. For Southeast Asia, Singapore’s entry quietly pulls the region into a strategic race once dominated by the US, China and a handful of others; for businesses, it signals that space-enabled data is becoming part of the operating environment, shaping logistics, resilience and urban systems — without users necessarily realizing the data has come from above. In a region defined by dense cities and scarce land, it’s perhaps no surprise that Singapore is looking upward for practical solutions as space on Earth runs out.

Thailand’s experiment in legalizing cannabis was supposed to signal modernization and create a post-pandemic growth engine through medical tourism. However, rapid decriminalisation in 2022 created an oversupplied market with little economic upside. By 2024, only a quarter of cannabis companies were profitable, and the promised USD1 billion industry never materialized.  

As voters head to the polls this Sunday, the ruling Bhumjaithai Party has stepped back from the policy it once championed, while opposition parties advocate recriminalization. However, the bigger risk isn’t the collapse of the cannabis industry itself, but the precedent it sets. If reforms can be rolled back within a single electoral cycle, investor confidence in Thailand’s ability to sustain new industries — at a time when growth engines are already scarce — becomes harder to secure. 

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