On Saturday, Japan’s ruling party elected conservative nationalist Sanae Takaichi as its leader, making her the country’s first female prime minister—a significant move for both investors and neighboring nations.
The Liberal Democratic Party (LDP), which has held power for most of Japan’s postwar history, chose the 64-year-old Takaichi amid rising public discontent over increasing prices and growing support for opposition groups pushing for economic stimulus and stricter immigration policies.
A vote in Congress to find a successor to Isaba is set for October 15.
Kochi is the preferred choice due to her party’s substantial majority in the legislature.
I Will Inherit the Party of Crisis
As the only woman among five candidates from the LDP, Kochi rises to the challenge at 44, striving to become the youngest leader in modern Japan.
Kochi, who previously served as Minister of Economic Security and Home Affairs, is stepping into a party grappling with significant issues.
Other political parties, including the People’s Democratic Party and the Anti-Immigrant Sansate, have been attracting younger voters, which poses a challenge for the LDP.
The LDP and its coalition partners have lost their majority in both houses over the past year, leading to Isaba’s resignation.
“I’ve been hearing critical feedback from across the country, with many people unsure of what the LDP represents anymore,” Kochi stated in her speech before the second vote. “That sense of urgency motivated me. I want to transform people’s concerns about their daily lives into hope.”
She cites Margaret Thatcher as a major influence.
As a supporter of Abe’s economic policies known as “Abenomics,” she has previously criticized the Bank of Japan’s interest rate hikes aimed at stimulating the economy through aggressive spending and straightforward monetary policy.
Such shifts in spending may raise concerns for investors about Japan’s considerable national debt.
Naya Hasegawa, chief bond strategist at Okasan Securities in Tokyo, mentioned that Takaichi’s election might influence the Bank of Japan’s upcoming decisions on interest rates.
Discussing a Revision of the Trump Trade Agreement
Takaichi also mentioned the potential for renegotiating an investment agreement with former President Trump, which had reduced tariffs in exchange for investments backed by Japanese taxpayers.
Japan’s ambassador to the U.S., George Glass, congratulated Takaichi, expressing eagerness to enhance the partnership between the two nations.
However, her nationalist stance may strain relations with neighbors like South Korea and China, as her visits to the Yasukuni Shrine, a site seen as a symbol of Japan’s militaristic past, may be controversial.
Takaichi has advocated for revising Japan’s pacifist postwar constitution and recently suggested establishing a “quasi-security alliance” with Taiwan, which has drawn attention due to China’s claims over the island.
Taiwanese President Lai Qingte has welcomed Takaichi’s election, hoping for stronger ties between Taiwan and Japan in areas like economic collaboration, security, and technological cooperation.
If endorsed as prime minister, Kochi declared, “Japan is back!”
“I’m ready to focus entirely on my responsibilities—work, work, work,” she expressed in her victory speech.
A press conference is expected to be held around 6 PM.
