Sanae Takaichi, Japan’s first female leader, could hardly have wished for a smoother start, with the Tokyo Nikkei stock index hitting an all-time high on Tuesday.
The share rally reflects market cheer that after weeks of political uncertainty, Takaichi (64) will finally get her feet under the prime minister’s table.
Widely seen as being on the far right of the ruling Liberal Democratic Party (LDP), which has dominated Japanese politics since 1955, Takaichi nearly missed her chance to make history.
The LDP’s 26-year coalition with Komeito, a Buddhist-backed party, disintegrated over her hardline positions and refusal to accept tougher rules for political funds from corporations.
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Takaichi was forced to scramble for a replacement, which she found in the Japan Innovation Party, known as Ishin, a right-wing populist party based in Osaka, Japan’s second city.
Normal politics has effectively been suspended since outgoing prime minister Shigeru Ishiba led his coalition government to its second major loss in a July general election.
But Takaichi’s honeymoon will be brief. She now heads a fragile minority coalition that will need to form alliances with other conservative parties to pass legislation. Ominously, she is the fourth Japanese prime minister to hold office since 2020.
Like her mentor, former prime minister Shinzo Abe, who was assassinated in 2022, Takaichi’s first priority will be proving that she can set aside her ideological concerns and solve immediate practical problems.
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The price of rice, a national staple, has doubled in the last year, partly because of hot weather. Wages lag inflation: a cabinet office survey last month found nearly three-quarters of respondents want the government to tackle the cost of living crisis.
Though vague on policy details, Takaichi has discussed a return to monetary tinkering and higher government spending. Ishin is reportedly pushing her to scrap an unpopular consumption tax on food.
The new prime minister’s first big diplomatic test will come next week, when she will host US president Donald Trump, on his way to the Asia-Pacific Economic Co-operation (APEC) summit in South Korea. Takaichi has hinted at renegotiating a tariff agreement that saw Japan promise to invest $550 billion (€473 billion) in the US.
A famous admirer of Margaret Thatcher, like the former UK prime minister, Takaichi has little time for feminism. She is a long-time opponent of allowing a woman to become emperor, opposes gay marriage and rejects revisions to Japan’s civil law that would allow married couples to use different surnames.
She has built her political brand with an unabashed nationalism: one of her first policy proposals is to introduce a law next year to punish acts that damage the Hinomaru, Japan’s national flag.
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Her hawkish positions on defence, particularly on China, will be closely watched for signs that she could roil ties. China’s ministry of foreign affairs gave a notably cool reception to her election on Tuesday, describing it as “Japan’s internal affair” and calling on her to “honour [Japan’s] political commitments on major issues including history and Taiwan”.
Takaichi has previously cast doubt on historical accounts of war crimes by the Japanese military in China. In a recent book, she argued that contemporary politicians have no right to judge the decisions made by Japan’s second World War leaders.
“If Japan had won the war, Japan probably wouldn’t be blamed by anyone now, and those who started the war would be heroes.”
