Sanae Takaichi has made history as Japan’s first female prime minister, achieving this milestone on her third attempt. Following a turbulent few weeks leading up to her appointment, she now faces significant challenges as she steps into this pivotal role. The immediate focus will be on addressing rising prices through a supplementary budget and implementing a reduction of ten seats in Japan’s lower house, as outlined in the coalition agreement with the Nippon Ishin Party.
While these tasks present difficulties, they are not the most formidable issues on Takaichi’s agenda. More pressing is her approach to the evolving trade relationship between Japan and the United States. Coupled with this, she must confront Japan’s slowing and aging economy. As a self-identified fiscal dove, Takaichi advocates for tax cuts and increased government spending to stimulate growth. However, with Japan’s public debt exceeding ¥1 quadrillion, concerns from investors loom large over her proposed fiscal strategies.
Takaichi’s premiership comes at a critical juncture for the Bank of Japan (BOJ), which is contemplating raising interest rates. Balancing her economic ambitions with the realities of Japan’s financial situation will be a crucial test of her leadership. Her victory represents a significant moment in Japanese politics, but it may be short-lived if she fails to maintain harmony within the ruling coalition and address the challenges that have plagued the Liberal Democratic Party (LDP) in recent years.
Takaichi’s leadership will be scrutinized closely, especially given the instability reflected in the recent history of the LDP, which has seen four prime ministers in just five years. As she embarks on her term, her ability to navigate complex political landscapes and economic pressures will determine not only her own legacy but also the future direction of Japan.
