Ever since the reform package was rejected on Aug. 8 and Koizumi announced new elections, he has been gaining momentum in the polls. If he ultimately succeeds, it’s expected he will gain parliamentary support to push his reforms through.

“It looks like he will win on Sept. 11,” Mazanec says.

“People are excited about this prospect. Investors are leaping into Japan.”

“The outlook for Koizumi looks better,” agrees Tom Rogers, senior currency analyst at Thomson Financial. “It looks like he will win re-election, and that will be a real positive for the economy.”

The bottom line is that “postal reform would lead to greater productivity” for the Japanese economy, says

Naomi Fink, senior currency analyst at BNP Paribas.