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The Takeaway
Japan’s ruling Liberal Democratic Party (LDP) elected Takaichi Sanae, a hardline conservative, as its new leader on October 4. Her victory comes as the LDP grapples with a loss of public trust, soaring living costs, and unprecedented setbacks in recent elections.
During her press conference after winning the party vote, Takaichi vowed to address the cost-of-living crisis and reaffirm Japan’s alliance with the United States. She also softened her earlier remarks about revisiting a recently concluded bilateral trade deal with Washington. However, her reputation as a wartime history revisionist and China hawk indicates that the LDP, under Takaichi’s leadership, could shift away from the more centrist pragmatism of her recent predecessors.
If Takaichi is confirmed by parliament as expected, she will make history as the first woman to become Japanese prime minister.
In Brief
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The 64-year-old Takaichi, a former economic security and internal affairs minister, is aligned with the LDP’s right wing and is a protégée of the late Japanese prime minister Abe Shinzo. She has pledged to revive his ‘Abenomics’ agenda of aggressive monetary easing, fiscal stimulus, and structural reforms to grow the economy, while also emphasizing economic security and defence.
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The support for Takaichi among fellow LDP members underscores the party’s inclination for stability and ideological continuity over reformist renewal. By elevating Takaichi, party elites opted for predictability amid crisis, reaffirming the influence of the ‘Abe faction’ rather than embracing 44-year-old Koizumi Shinjiro’s call for generational change. While many Diet members backed Koizumi in the first round, the prefectural (non-Diet, rank-and-file) vote favoured Takaichi. Her ascent reflects the LDP’s anxiety over the rise of right-wing populist parties and the growing public distrust that such movements have exploited.
- Takaichi faces a confirmation vote in the Diet — the country’s parliament — later this month. The ruling LDP-Komeito coalition, weakened by public anger over soaring prices and stagnating incomes, currently lacks a majority in both the lower and upper houses. In July’s upper house election, right-wing parties gained ground by promising immediate tax cuts and tougher immigration controls. It remains unclear whether opposition parties will rally behind an alternative candidate for prime minister.
Implications
The LDP seems to be calculating that conservative populism is the best way to stem public discontent. Years of stagnant wages and rising prices have eroded public trust in Japan’s ruling party, culminating in major electoral losses. Takaichi is now promising an 'Abenomics 2.0,’ combining tax cuts, subsidies, and aggressive spending to ease inflation’s burden, while still professing “the importance of fiscal prudence.” She has criticized the Bank of Japan’s recent interest rate hikes and signalled a return to expansionary spending to help Japanese households “regain hope.” Investors, however, remain cautious. Her proposed spending surge could worsen Japan’s debt and weaken the yen.
Takaichi’s win represents ideological continuity rather than transformation. As Japan’s first woman prime minister-in-waiting, her leadership is historic, but her politics remain rooted in the party’s old guard. Her opposition to separate surnames for married couples and limited advocacy for gender equity have led some observers to call her a “symbol of progress without reform.” Within the LDP, she must manage factional rivalries and maintain co-operation with the LDP’s coalition partner, Komeito, whose centrist base will resist a rightward drift. Whether she can unify these competing forces will determine if her tenure stabilizes the party or accelerates the fragmentation already visible among Japanese conservatives.
What’s Next:
1.Hawkish Taiwan policy could prompt blowback
Takaichi’s leadership marks a decisive shift toward a more confident Japanese foreign policy. She is expected to accelerate Japan’s defence buildup and push constitutional revision to strengthen the role of the Self-Defense Forces — possibly enabling deeper security co-operation with Taiwan under the U.S. alliance. Her commitment to the U.S. alliance, meanwhile, remains strong — she has pledged to uphold the investment deal with U.S. President Donald Trump whereby Japanese funding will be offered in exchange for tariff relief. At the same time, Takaichi’s staunch support for Taiwan and her unwavering hardline stance on territorial disputes with China as well as North Korea’s nuclear program could heighten regional tensions.
2.Beijing expected to test the waters, Seoul stays cautiously optimistic
Beijing is expected to test her resolve through military or economic pressure. South Korean President Lee Jae Myung has expressed a willingness to sustain “positive momentum” in bilateral ties, but relations remain fragile. Any inflammatory remarks by Takaichi — or renewed visits to Yasukuni Shrine, the controversial monument to Japan’s war dead — could quickly undo recent progress. While she signalled restraint in her victory speech by distancing herself from previous visits, Beijing and Seoul are likely to watch how she handles sensitive historical issues as an indicator of her broader diplomatic approach.
In the Indo-Pacific region, Takaichi says she aims to “travel the world and declare that Japan is back,” promising a more active diplomatic presence and stronger co-operation through the Quad (with Australia, India, and the U.S.). Her approach will likely strengthen deterrence but risks escalating regional friction if not paired with deft diplomacy.
3.Canada–Japan ties likely to improve
Continuity is expected to define Canada’s relations with Tokyo under Takaichi, as Ottawa sees Japan as a cornerstone of Canada’s Indo-Pacific Strategy. Her government is expected to sustain collaboration on critical minerals, clean energy, advanced technology, and defence. In July, the two countries signed a landmark Security of Information Agreement (SIA), enabling closer intelligence and defence collaboration. The SIA facilitates the sharing of classified data and advancing defence technology partnerships, aligning with Japan’s efforts to work with like-minded democracies.
Canada and Japan already co-operate closely through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and share a commitment to upholding a rules-based Indo-Pacific order. Additionally, there is an opportunity for a bilateral meeting between Canadian Prime Minister Mark Carney and Takaichi at the upcoming Asia-Pacific Economic Cooperation (APEC) forum leaders’ summit in Gyeongju, South Korea. Both governments are expected to use the occasion to advance discussion on trade liberalization, supply-chain security, and artificial intelligence governance.
• Edited by Vina Nadjibulla, Vice-President Research & Strategy, Ted Fraser, Senior Editor, APF Canada
