Sanae Takaichi’s Premiership Bid Imperiled by Coalition Exit

On October 4, 2025, former economic security minister Sanae Takaichi was elected leader of the Liberal Democratic Party (LDP), positioning her to become Japan’s first female prime minister. Her path to office, however, faces a major obstacle: on October 10, Komeito withdrew from the ruling coalition over a political funding scandal, leaving the LDP 37 seats short of a lower-house majority and casting doubt on her confirmation vote.^[1][2][3]

Coalition Breakdown

Komeito’s departure reduced the coalition’s combined seat count from 326 to 297 in the 465-seat House of Representatives. The split stems from allegations that LDP lawmakers improperly funneled donations through Komeito affiliates. Komeito leaders demanded an independent investigation and resignations; the LDP’s refusal prompted the split.^[2][4][1]

Economic Agenda and Market Reaction

Takaichi campaigned on a reflationary agenda resembling “Abenomics,” advocating:

• Additional government bond issuance to alleviate household inflation pressures
• Cash handouts and one-off tax rebates to consumers
• An increase in the tax-free income allowance by year-end
• Maintaining current BOJ interest rates, having previously criticised rate hikes as “unwise”^[5][6][7]

Financial markets reacted positively on October 6: the Nikkei 225 rose 4.9 percent to 47,128.54, while the yen weakened 1.8 percent against the dollar, trading at ¥154.30. Goldman Sachs analysts project moderate fiscal expansion only after securing broader Diet support.^{[6][8][9][10]}

Diplomatic Challenges

Takaichi signals alignment with a hard-line China stance and deeper Japan-U.S. supply-chain integration. U.S. President Donald Trump publicly congratulated her via social media and is reportedly considering a Tokyo visit in late October, though details remain unconfirmed.

Her handling of potential visits to Yasukuni Shrine—a site of controversy for honoring Japan’s war dead including convicted war criminals—will test relations with China and South Korea, both of which have protested past prime minister visits.^{[11][12][13][14][15][1]}

Gender and Social Policy

Her leadership breaks a significant gender barrier: Japan ranks 116th of 146 countries on the World Economic Forum’s Global Gender Gap Index and trails peers on female political representation. Nonetheless, Takaichi opposes same-sex marriage and separate surnames for married couples, maintaining conservative views that may stymie social reforms.^[14][16][17]

Path to Confirmation

To secure the prime ministership, Takaichi must:

1. Negotiate support from minor parties or independents to achieve the 233-seat threshold in the lower house.
2. Present innovative policy proposals beyond stimulus-driven measures.
3. Rebuild public trust after the LDP’s recent electoral setbacks and funding controversy.

Her confirmation vote is scheduled for mid-October. Failure to secure a majority could trigger another leadership contest or a snap election.