Sanae Takaichi is the first woman to become Japan’s prime minister, rising to the top of the ruling LDP party that has dominated post-war politics in Japan. The LDP has gradually slipped from its almost unquestoned position as the most powerful political force in the nation to the point where it is now: a weakened party that had to struggle put together a coalition of several smaller parties in order to put their chosen one in office.
So what does this mean as Japan’s newly elected leader takes over and within a few days will be meeting with the president of the United States for formal talks in Tokyo as he makes his trip across Asia? Where will the party go next? What are Taikichi’s plan to take it there?
Enter Tobias Harris, the founder and principal of Japan Foresight LLC who has been following and and analyzing Japan’s politics and the geopolitics of Asia for more than 20 years, and recently launched his Substack, “Observing Japan.” He says there are two “really big questions” that will be on the table when Takaichi and Trump sit down to talk next week.
“Of course the issue that has really dominated the bilateral relationship this year has been trade and Japan was not exempt on Liberation Day back in April and then spent several months…trying to hammer out a deal that worked, something that got Japan’s tariffs down to a more reasonable level,” Tobias says. Given that “there’s still some grumbling” in Japan about the terms of the deal, especially the $550B that Japan will supposedly invest in the U.S., he expects this to be on the negotiating table.
”And then the other big piece is defense spending and there’s been some pressure from the Trump administration for Japan to match what NATO allies are doing when it comes to raising defense spending,” he says, noting what will look like a big plus to Trump. “What we’re hearing already from Prime Minister Takaichi is that she wants to raise defense spending, she already wants to go faster, to 2% of GDP, which was what they promised to do, but probably is going to try to move beyond that as well.”
So dive in and hear as Tobias goes far beyond the Takaichi-Trump meeting next week to look at the issues she face s as prime minister, especially when it comes to boosting government spending and trying to keep the Bank of Japan from tightening monetary policy too quickly.
Hear Tobias recount how this middle class, not politically connected, drum playing, motorcycle riding young woman became the protoge of one of Japan’s most powerful prime ministers in modern history, and is now doing the job that Shinzo Abe once did.
Off to a good start in Japan… 00:01:14.490
Prime Minister Takaichi has to be feeling pretty good that after several attempts, now she’s finally the Prime Minister, she has laid out a fairly ambitious agenda, and she will provide a lot more detail about that on Friday when she speaks to the diet. And frankly, she also, I think, is getting a bit of a tailwind. The first couple of polls have come out since she became Prime Minister on Tuesday. She has performed very well in those polls, certainly compared to her two immediate predecessors, and certainly compared to how the LDP looked before she took over. So, she certainly has a chance to maybe right the ship, both for her party, and also maybe set a new course for her country. I mean, it’s C\certainly an intriguing moment for Japanese politics.
Trump-Takaishi issues 00:02:26.680
Well, there’s two, I think, really big questions. Of course, the issue that really has dominated the bilateral relationship this year has been trade. And, you know, Japan was not exempt on Liberation Day back in April, and then spent several months, you know, trying to hammer out a deal that worked, something that got Japan’s tariffs down to a more reasonable level, got automobile tariffs down to a more reasonable level. Given the importance of Japanese automobile exports as part of its overall exports to the United States, T\the deal that now former Prime Minister Ishiba got was not not ideal for Japan. I think there’s still some grumbling about the terms. I think a lot of questions about, particularly the, investment portion of that, the supposed $550 billion that Japan will provide investment. I mean, there are a lot of questions about what exactly that means, and how it’s going to be provided, and which projects are going to be funded but…
Many issues but improving the bilateral relationship is key 00:03:21.020
You know, getting to that over the finish line was an important milestone for Japan. I think now, you know, Prime Minister Takaichi is going to have a lot of work to do to fill in some of those details as they try to figure out how this deal will work, if there are other ways of deepening the bilateral economic relationship, and so that’s a, you know, pretty big question going forward. There’ll be a lot of discussion about that, a lot of discussion about what investments Japan will provide. And then the other big piece is defense spending, and there’s been some pressure from the Trump administration for Japan to match what NATO allies are doing when it comes to raising defense spending, and Japan has tried to push that off a little bit, in part because of domestic political stability, but What we’re hearing already from Prime Minister Takaichi is that she wants to raise defense spending. She’s already said she wants to go faster.
Defense issue in Japan in important now 00:04:27.570
Certainly the fact that she came out in her first press conference as Prime Minister talking about raising defense spending, I mean, clearly that’s a message maybe, you know, of course for a broader audience, but perhaps with one audience in mind in particular, that it will be easier for her to say next week. I’m already talking about raising defense spending, I’m already talking about, you know, moving up plans for the next 5-year defense budget plan.
Various security concerns are front and center 00:04:50.150
You know, I… this is something that I want to do because I think Japan needs to do it. I think she’s sincere about that, and as you say, I mean. This is a politician who, at least as much as Abe, and maybe even more, is someone who talks about the threats Japan faces, the dangers Japan faces in the world, the need for Japan to do more to defend itself, to be responsible for its own security, not just, you know, not just in national security with, you know, an armed force and the military, but also she talks a lot about food security, she talks about energy security, she talks about economic security. This is… this is really her her mission as a politician, and it’s what she’s going to be focused on. And so, frankly, I think saying to President Trump, look, I want to raise defense spending, I want to do more, that’s gonna be, I think, very well received. I think that message will go over very well next week.
Bilateralism in action 00:06:05.990
The expectations for this meeting, you know, this is a meeting that Prime Minister Takeichi’s not going to have a lot of time to have prepared for. I think, you know, the focus really is going to be on the deal that was made. It’s going to be very, you know, in general, I think, you know, both during the, To some extent during the first Trump administration, and certainly, I think, under the second administration, there’s really a bilateral focus rather than a prioritization of regional initiatives. So, I think, there’s been some gestures towards preserving the quad cooperation with India and Australia and Japan, but it’s not nearly as much of a priority as, these bilateral frameworks. Of course, they like working on economic issues in a bilateral setting. So it’s… the expectation, I think, is going to be what can we do in a bilateral framework? I mean, you know, there’s also, you know, the Biden administration that focused a lot on trilateral cooperation between Japan and South Korea. I think we’ve seen… less of that, certainly at the presidential level. Maybe a little more focused at the working level. So I think we should expect this is going to be a meeting more focused on the bilateral rather than the broader region.
Tariffs and investment 00:07:56.140
The main focus, I think, for implementation going forward really is this investment piece, because, you know, there was this question when the deal was announced, the U.S. was slow to actually implement, legally the reductions in tariffs that are promised. So now you have, tariffs basically set at 15% across the board, you know, for, you know, everything that Japan exports to the United States. it’s certainly higher than where things were before, but better than it could have been, and so I think, you know, at that point Japan is learning to live with that, and certainly I think anything higher than that would have been very difficult, and explains why the deal, ultimately, took some time to get it done. In terms of what Japan has promised to do, you know, there was talk about purchases of agricultural products, some talk about airplanes. Some talk about reducing non-tariff barriers. Some of the, you know, filling in some of the details of that, and how Japan is implementing that, how it’s reducing those non-tariff barriers. Not… there hasn’t been as much on that front yet.
Trade deal details to be hammered out 00:09:04.990
There’s going to have to be some work on, Japan, what has Japan done, on its side of the bargain when it comes to market access for the United States. But really, I think a lot of the focus is on this investment framework, where, the text of the Memorandum of Understanding that was signed, several weeks ago basically says, that there’s going to be this process where, you have a committee that’s going to make recommendations for projects that Japan can invest in. Those recommendations will go to the President, the President will decide which projects are going to go forward, and then there’s going to be an expectation of Japan providing investment. That is not necessarily how the Ishiba government was explaining what was agreed, because they’re… the way they’ve talked about it is, well, some of it might be, you know, greenfield investment, some of it might be, loan guarantees, so you have the Japan Bank for International Cooperation, which will provide loan guarantees to private companies that are investing in projects and things like that, where it’s not exactly, you know, the Japanese government, you know, writing a check to the United States, it’s a little more circuitous than that. And so it’s, you not entirely clear what projects are going to be on the table. Tobias Harris: how exactly is this going to work? What, like, who is actually putting up the money?
Abe’s political heir 00:11:07.270
So, she describes herself as Abe’s political heir, and I think there’s a reasonable… I mean, that’s reasonable. I mean, she was very close to him, she was, I think, one of…his most loyal lieutenants. I mean, Abe was very good at… he cultivated, basically, a group of loyalists around him who, you know, he was loyal to them, they were loyal to him, and they were a big part of his success. And she was very much in, you know, the heart of that group. Abe helped her along the first time she became a cabinet minister. It was in his first cabinet in 2006. Then, when he came back, she got an important party job, then was cabinet minister in several different capacities. She ran for leadership in 2021, he basically ran her campaign, so they’re very close, they share ideas, they share beliefs, they’ve worked together for a very long time. But they’re very different politicians, and that is something, I think, just to keep in mind, that, you know, Abe, of course, political blue blood… grandson of a prime minister, son of an almost other Prime Minister, just from, you know, a real dynastic politician, the kind of people who have dominated Japanese politics and certainly have dominated the LDP for a long time..
Takaichi different strokes…compared to Abe 00:12:23.610
And Takaichi, very much not that. She comes from, you know, really a middle-class family, you know, her family did not necessarily, you know, basically discourage her from going to an elite university in Tokyo, which she could have gone to, stayed closer to home, so she really had to work her way into politics in a way that Abe very much did not. I mean, Abe was his father’s secretary, and then his father passed away, and he ran for his father’s seat.… she had to really, you know, kind of claw her way into politics, and, you know, really, I think sheis a talented politician, without question. I mean, really has a very strong public following. I think when you see, you know, rallies, you see how crowds are responding to her. She gets huge, huge crowds out.
Dedicated; diligent 00:12:58.470
For her, she is, I think, an extremely hard worker, something that the Prime Minister teased him about after she won, sort of as the baton was being passed, you know, telling her basically, you know, remember work-life balance. So, I mean, she’s just, like, is very diligent, has extraordinary command of policy details. So, you know, you watch these press conferences, you know, and, you know, really has very, very detailed grasp of a whole range of issues, you know, can speak sort of fluently, almost without notes, you know, for quite extensive lengths of time. So, you know, she’s going to work out, you know, she’ll outwork anyone. I mean, I think that really is kind of a key to her success in some ways. Just, you know, tremendously diligent.
Takaichi faced a tough road…is helping women in the party 00:14:35.930
I think there’s still some real obstacles, and the fact that, you know, the LDP has fewer than 10% of its diet members who are women. So, the obstacles are there. In some ways it speaks to, how exceptional she is in her way, that, you know, she really, by her… by her abilities… this wasn’t… this wasn’t gifted to her. I mean, she had to really, claw and… fight, you know. To be helped along by Abe… for Abe to see her as a talent, and to really foster her career and give her opportunities, and for her to match up to the, you know, to those opportunities, in that sense, I mean, she’s unique. One thing I think she will try to do, and I think we’re already seeing this, is that, you know, she, I think, will try to…deep in the pipeline of female, you know, talented female politicians. And in her, in her government, so both in the cabinet, but also in sub-cabinet posts. She has 10 women in those spots, which doesn’t sound like a lot, but you realize that’s 25% of the women diet members in the LDP. So, you know, she drew a lot from that pool. I think she’s going to really try to develop their talents to really identify, you know, future leaders from their ranks, and help them along in a way that she was helped along by Abe...but the real test is getting more women into, you know, running for office, because ultimately, you know, it’s a parliamentary system, you’ve got to climb the ladder.
Not Abe’s coalition 00:17:10.520
The biggest differences between what enabled Abe to be as successful as he wasn’t to last as long as he did, compared to the situation now is, you know, he had large majorities in both houses of the diet, and in part with the support of the Buddhist party Komito, which has now left the coalition, and Takaichi will not have that. I mean, she has, depending on how you measure things, maybe a near majority, but it’s very slender. It is very fragile. She has a coalition partner that did not actually want to take seats in the government, which gives it a much easier way of leaving if it doesn’t like what’s going on. There’s more policy alignment, so this party, Ishinokai, is this Osaka-centered. neoliberal, anti-establishment, populist at times. They agree… there’s… I mean, I think a lot of agreement between things that she wants to do and what they want to do, but there are some key areas of difference, and, you know, if they don’t like… they’ve already said that if they don’t like what she’s doing, or if they feel like she’s not taking seriously their demands, that they will leave the coalition. So, it’s a fragile situation, she does not have a whole lot of room for error, and, you know, she has, you know, a really, maybe even a bigger task than just managing a coalition. You know, the LDP lost a majority in the lower house last year, lost a majority in the upper house this year.
Why the LDP Slipped; what it needs to do 00:18:34.120
And she’s going to have to find a way to revive the LDP’s fortunes. Now, she was elect… she campaigned for the LDP’s leadership basically saying, the problem with our party is that we have lost our way, and we have abandoned Abe. If we stuck to his principles and what he did, we would… we wouldn’t be in this mess. His successors failed, they…forfeited the public support, so we need to return to what he did, the public… the voters will come back to us, and everything will be fine. And maybe that’s true. Maybe the polls we’ve seen suggest that that’s… that’s exactly what’s going to happen, but there’s not a guarantee of that. And…it could very easily go south. So, she really has this political test first, you know, making sure that she actually has the power to do the things that, you know, these big ambitions she has. If the political power’s not there, it’s going to be very hard to do that.
Spending needed 00:20:26.580
Her heart is in fiscal expansion, because ultimately, I think her philosophy is there are things that have to get done. You know, higher defense spending has to happen. There are, you know, what she calls strategic investments that have to happen to ensure that Japan is secure, and that Japan is growing, and is growing in, you know, high-tech sectors. So, she thinks that spending is necessary, that you have to spend to ensure the country’s future. There are political constraints, though. You know, this is not something where she can just do whatever she wants. You know, has things that it would like to see money spent on, but also, you know, as a neoliberal party, actually, you know, wants smaller government, wants greater efficiency. One of the things that they pushed the LDP to embrace is basically Japan’s… a Japanese equivalent to Doge. So, there’s going to be, you know, some push in that direction from, you know.
Fiscal probity matters too 00:21:24.190
You know, we can’t just…run bigger deficits, we actually have to find, you know, savings, we have to economize somewhere. So that’s… that’s going to be one, important constraint.
Bond market as disciplinarian 00:21:34.400
Another constraint’s going to be the bond market, right? Interest rates are going to tell her how far she’s able to go, and, just what they think about the kind of plan she’s making.
…and politics 00:21:46.410
Another constraint is just opposition parties. She still has to, you know, find support to get, you know, a supplemental budget through the diet, to get a regular budget through the diet next year. Even with Isshin, they’re a little short of votes, so they’re going to have to find votes from somewhere else. And there’s going to be sort of a push and pull on just how much they can get away with, including in those budgets. So, it’s, you know, there’s a lot… it’s going to be a lot of tug-of-war, there’s going to be a lot of just trying to figure out. You know, other things being equal, she would rather spend on the things she thinks is worth spending on, but the reality is there’s going to be pushback from a lot of different directions.
Fiscal VS monetary policy choices/issues 00:23:59.290
Well, it’s… I mean, like with fiscal policy, where you’re just getting… I mean, there’s a lot of different signals, and you know, the message at times has been sterner, other times it’s been more restrained. I mean, after she won the LGP leadership, she gave a press conference, and it was a pretty… pretty bold statement on monetary policy more the last couple weeks. She’s, I think, dialed that back a little bit. In her first press conference the other day, the message was more about, you know, making sure the government and the BOJ are on the same page, you know, that we have to still abide by the 2013 accord between the BOJ and the government, you know, and the goal is overcoming deflation. You know, last year, you know, there was a lot of talk about her tolerance for the yen being weaker. We have not heard that kind of messaging. From her, which I think… you know, frankly, and let’s not forget the bilateral context with the United States, because if she comes out and talks about how she’s happy if the yen gets weaker, that is not going to go over well in Washington. You know, that is going to be a new friction point, you know, between the Trump administration and Tokyo. So, she doesn’t have a free hand on that
And BOJ policy will…? 00:25:05.380
If the BOJ decided to wait longer, I don’t think she would complain about that. You know, I think she will… you know, prime ministers have all sorts of ways, you know, both overt and covert, of making sure that the Bank of Japan understands their priorities. We’ve seen prime ministers do things like this in the recent past, and also in the more distant past. this happens, we know this happens, and so, you know, of course, we’ll see what happens next week when the BOJ meets, but I think in general, I think the desire from the Takeuchi government is
A difficult agenda to achieve rapidly 00:26:16.940
Japan matters, Japan is really important, and I think we’ve all…you know, we took for granted for a long time, you know, Japan was stable, right? It had the Abe years, things, you know, you knew exactly what you were getting from Japan, and I think the reality is that you now have this moment. It is going to be interesting because you do have this very ambitious Prime Minister, you know, a prime minister who wants to move fast, who has a lot of things she wants to do, but this is an era where Japan is much more fragmented, it is very hard, I think, for any political force to get a majority, and so meeting the challenges at the moment…in this moment of fragmentation. It is going to be extraordinarily difficult, and how she navigates this, and whether she’s able to succeed, I mean, I think… and it will, in some ways, could end up being a lesson for a lot of other of Japan’s peer democracies in the G7, where, you know, you see the similar sorts of fragmentation, but of course, enormous challenges. So, you know, watching Japan try to navigate this.
Heading back for more insight 00:27:18.110
You know, its going to be a fascinating case study, I think, for everyone to watch. And so, you know, don’t change this channel. I mean, I think there’s really…It’s really going to be a fascinating moment. So I’ve only had my own firm for about a year and a half, but I’ve been, you know, watching, you know, been a Japan politics watcher in various forms for 20 years. I’m heading back next week. There’s a lot going on, I mean, that’s why I’m really excited to be going back.
Sanae Takaichi[a] (born 7 March 1961) is a Japanese politician who has served as Prime Minister of Japan and President of the Liberal Democratic Party since 2025. She is the first woman to hold either of these positions, as well as the first from Nara Prefecture.[3] A member of the House of Representatives from 1993 to 2003 and since 2005, she also held several ministerial posts during the premierships of Shinzo Abe and Fumio Kishida.
Born and raised in Yamatokōriyama, Nara, Takaichi graduated from Kobe University and worked as an author, legislative aide, and broadcaster before beginning her political career. Elected as an independent to the House of Representatives in the 1993, she joined the Liberal Democratic Party (LDP) in 1996. A protégé of Abe, Takaichi held various positions during Abe’s premiership, most notably as Minister for Internal Affairs and Communications. She was a candidate in the 2021 LDP leadership election, but was eliminated before the runoff, placing third.[4] From 2022 to 2024, during Fumio Kishida‘s premiership, she served as Minister of State for Economic Security. Takaichi made her second run for the party leadership in the 2024 leadership election, where she came in first in the first round but narrowly lost in a runoff to her predecessor Shigeru Ishiba. She eventually ran again in the 2025 leadership election for the third time and placed first in both rounds of voting, defeating Shinjirō Koizumi, and becoming the party’s first female president.[5] After securing a coalition agreement with the Japan Innovation Party, Takaichi was elected prime minister by the National Diet on 21 October, becoming the country’s first female prime minister.[6][7]
Takaichi’s views have been variously described as conservative or ultraconservative.[8][9] Her domestic policy includes support for proactive government spending and the continuation of Abenomics. She has taken conservative positions on social issues, such as opposition to same-sex marriage, the recognition of separate surnames for spouses, and female succession to the Japanese throne. She supports revising Article 9 of the Constitution of Japan, which renounces the use of military force, a pro-Taiwanese foreign policy, and strengthening the US–Japan alliance. A member of Nippon Kaigi, she has promoted a nationalistic view of Japanese history and criticized the Murayama and Kono Statements. She has made regular visits to the Yasukuni Shrine, which is viewed as controversial, especially in China, North Korea, and South Korea.
