Takaichi of Japan Set to Become First Female Prime Minister—Turning Point and Challenges Indicated by New LDP President

1. What Happened: LDP Presidential Election Results and Government Transition Timeline

In the LDP presidential election held on October 4, Sanae Takaichi (64) emerged victorious, becoming the new face of the party. The LDP president is customarily chosen as the prime minister in the Diet's nomination, making Takaichi poised to become Japan's first female prime minister. The Diet vote is expected to take place around October 15, 2025. Recent reports indicate that the party's seat situation is challenging, highlighting the need for cooperation with opposition parties like Komeito.Investing.com+1

The same day's breaking news reported that Takaichi, who advocated for conservative and national security-focused policies and proactive fiscal measures, defeated reform-minded Shinjiro Koizumi in a runoff vote. The focus is on party recovery and addressing rising prices, with the LDP aiming to rebuild support through a "refreshing of the face."Reuters+1

2. Keywords of the Takaichi Administration: Conservatism, Proactive Fiscal Policy, Economic Security

Takaichi's political characteristics can be broadly categorized into three areas.

1. Conservatism and National Perspective
   Takaichi exhibits a strong "hawkish" stance, with a positive attitude towards constitutional revision, further strengthening of defense capabilities, and emphasis on collaboration with Taiwan. These positions may heighten tensions with China and South Korea while promoting deterrence and deepening the Japan-U.S. alliance.Reuters
   
   

2. Proactive Fiscal Policy and Crisis Management Investment
   In response to rising prices and declining real wages, Takaichi has proposed bold public investments in infrastructure, advanced industries, and security sectors, aiming to simultaneously support the economy and strengthen supply capacity. She has also mentioned household support measures like income tax cuts and cash benefits. In Japan, with its high national debt, balancing growth and fiscal discipline remains a structural challenge.Reuters
   
   

3. Economic Security
   Takaichi's approach is notable for promoting cooperation with allied countries and domestic re-shoring in strategic industries like semiconductors, AI, quantum, and EV supply chains. Reducing dependence on China and "de-risking" among friendly nations is an approach that enhances security at the cost of rising expenses.Reuters

3. Social Policy: The Gap Between Symbolism and Reality

The symbolism of being the **"first female prime minister"** is extremely significant. Gender equality in Japan remains low among developed countries, with a low percentage of women in decision-making roles. While Takaichi has pledged to expand the appointment of female ministers, she has been cautious about issues like same-sex marriage, selective surnames for married couples, and female imperial family branches, which has drawn criticism for her emphasis on traditional family values.

Her stance on historical recognition, such as visits to Yasukuni Shrine, could also cause ripples in neighboring diplomacy. The contradiction between the symbolic **"breaking of the glass ceiling"** and her policy conservatism divides opinions both domestically and internationally.AP News

4. Domestic Challenges: Prices, Wages, Growth, and Fiscal Policy

(1) Prices and Real Income
Households are under pressure from yen depreciation, resource prices, and delayed wage increases. The Takaichi administration needs to combine **short-term disposable income boosts (tax cuts, benefits) with medium-term supply capacity enhancement (investment, regulatory reform)**. However, excessively stimulating demand could reignite inflationary pressures, affecting long-term interest rates and exchange rates.Reuters

(2) Growth Strategy
How to design public-private investments in growth sectors like semiconductors, AI, biotech, and clean energy? The quality of policy design is crucial, including "exit strategies" for subsidies, development of human resources, R&D, data capital, and improving domestic demand productivity (digitalization, governance reform).Reuters

(3) Fiscal Sustainability
"Bold spending + tax cuts" inevitably raises concerns about debt expansion. It's essential to raise the medium-term growth rate, focus and concentrate expenditures, and reorganize fiscal rules that contribute to maintaining credibility.Reuters

5. Diplomacy and Security: Japan-U.S., Taiwan, China, and South Korea

Strengthening the Japan-U.S. alliance is Takaichi's fundamental line. She aims to accelerate cooperation in the Indo-Pacific (Quad, etc.), economic security frameworks, and strengthening supply chains for critical materials. However, emphasizing the deterrence of a Taiwan contingency may easily strain relations with China, and finding the optimal solution for historical, export management, and security cooperation with South Korea requires a delicate balance. Balancing strong deterrence with crisis management dialogue is key.Reuters

6. Political Management: Overcoming Divisions with Inclusivity

The LDP has suffered setbacks in recent elections, losing its solid foundation for single-party dominance. This implies the need for

• ① Negotiation skills to build policy consensus with opposition parties and Komeito,

• ② Reconstructing the centripetal force among the party's conservative, centrist, and reformist factions,

• ③ Regaining public trust through transparency and accountability,
  These three points are crucial. While Takaichi's strong communication skills are an advantage, the
  art of inclusion and compromise is also required.AP News

7. Market Perspective: Fiscal Expansion, Interest Rates, and Exchange Rates

Takaichi's proposed "crisis management investment" and income tax cuts can easily become themes in the stock market in the short term. On the other hand, there may be concerns about government bond supply and demand, rising interest rates, and fluctuations in the yen. Investors are weighing growth expectations (capital investment, renewal) against debt sustainability. Overseas media have also pointed out that proactive fiscal policy could invite market anxiety.Reuters

8. The Meaning of "First Female": Role Model and Institutional Design

As a role model for female politicians in Japan, Takaichi's presence is significant. However, unless the symbolism transforms into institutions, gender equality will not progress. Institutional levers such as political quotas (candidate balance), support for balancing childcare and caregiving with political activities, flexible work styles, and the visualization and KPI introduction of female managerial ratios in the public sector are in question. Even if Takaichi maintains a conservative stance, advancing practical female appointments and thorough harassment care can have a significant social impact.AP News

9. Initial Scenarios for the Takaichi Administration: Three Packages

1. Household and SME Support Package

   Temporary income tax cuts, fixed benefits, reduction of energy burdens, promotion of price pass-through, and strengthening of antitrust law enforcement, expansion of investment tax credits.
   
   
   

2. Supply Capacity Enhancement Package

   Focused investments in semiconductors, AI, energy storage, green hydrogen, pharmaceuticals, regulatory sandboxes, research funding for universities and technical colleges, qualitative enhancement of skilled immigration.
   
   
   

3. Security and Crisis Management Package

   Stand-off defense, space, cyber, electromagnetic domains, redundancy of critical infrastructure, stockpiling of pharmaceuticals and food, coordination among Japan, the U.S., and Taiwan.
   Reuters

10. Risk Management: The "Three Walls" of Resistance

• Fiscal Wall

  : Long-term interest rates, yen, government bond supply and demand.

• Diplomatic Wall

  : Relations with China and South Korea and economic interdependence.

• Social Wall

  : Divisions over same-sex marriage, surnames for married couples, and immigration policy. Overcoming these three walls requires evidence-based policy evaluation
  , gradual implementation, and transparent explanation.AP News

11. Outlook: From Symbolism to Implementation