TOKYO: Prime Minister Sanae Takaichi (oic) is poised to keep her core team in place in a customary reshuffle nearly a year after taking office, showing renewed confidence after weathering market turmoil and coalition frictions.
After weeks of speculation, Takaichi on Thursday is expected to retain Finance Minister Satsuki Katayama, top diplomat Toshimitsu Motegi and defense chief Shinjiro Koizumi, signaling to financial markets she believes her policies are working. She’s also set to give right-leaning coalition partner Japan Innovation Party, or Ishin, its first ministerial post - cementing the union that sealed her election victory as the main opposition splinters.
The continuity on display contrasts with Japan’s two previous leaders. In 2022, Fumio Kishida changed 14 of his 19 ministers in a dramatic overhaul after public outrage over his party’s ties to a religious group, while Takaichi’s immediate predecessor Shigeru Ishiba resigned around one year into the job. Takaichi’s administration has been relatively free from scandal and her support rates remain firm.
"Heading into 2027, Takaichi’s political standing is very strong,” said David Boling, managing director for Japan at the Asia Group. "She increasingly looks a prime minister with real staying power, closer to Shinzo Abe’s model of dominance than to Ishiba’s brief and failed premiership.”
Achieving her ambitious goals to transform Japan over the next six months will come down to establishing "diehard supporters” within the Liberal Democratic Party, he added.
For Takaichi, who is known for working independently rather than socializing with politicians, her operating style could complicate that task. She’s described getting three hours sleep per night as she pores over government documents, drawing concerns about exhaustion and isolation.
Still, retaining her core cabinet after a year that’s seen Katayama field unprecedented policy demands from US Treasury Secretary Scott Bessent, and her diplomats navigate a spat with China, shows Takaichi is on good footing with her top lieutenants. She also kept the ruling party’s senior leadership team intact, solidifying her support base within the party.
The fate of Yoshimasa Hayashi, who battled Takaichi for the LDP leadership last year, has been under a spotlight, although one local media report suggests he could stay as internal affairs minister. Changes to lower profile ministers are also likely in the works.
Takaichi is shoring up power at home before heading next week to New York to potentially meet Donald Trump on the sidelines of the United Nations General Assembly. Demonstrating Japan is a reliable and important ally before the US leader hosts Xi Jinping in Washington will be a key diplomatic goal, after she last year offended Beijing with comments over self-ruled Taiwan.
Takaichi was originally scheduled to address the UN on Sept. 24, the day Trump welcomes Xi for a grand state dinner, according to a previous UN schedule. Japanese officials have since avoided that awkward split screen, with Takaichi now speaking on the Tuesday when Trump is also slated to address the UN although no meeting has yet been publicly announced.
With Trump ramping up pressure on fellow US ally South Korea to send support to the Strait of Hormuz, keeping the US on side is important for Takaichi. South Korean President Lee Jae Myung’s popularity rating hit a record low this month after suggestions Seoul could help the US over Iran. By contrast, Takaichi’s approval rating currently remains robust at around 53%, according to the latest poll by public broadcaster NHK.
Takaichi has two things going that could please Trump. Japan has been outpacing other nations by announcing two rounds of investment projects in the US worth $109 billion, or roughly 20% of a $550 billion initiative established under a trade deal last year. Japan is also buying more oil from the US as it reduces its reliance on the Strait of Hormuz, where shipping has been disrupted by the war.
"The biggest challenge for Japan’s foreign policy is managing its relationship with China effectively, but the reality is that Takaichi has completely failed to do so,” said Kensuke Takayasu, professor of political science at Waseda University. "Takaichi’s stance on the China issue is at odds with Trump’s. Trump wants to take a more conciliatory approach.”
Once Takaichi returns from New York, her focus will turn back to parliament, where her policies continue to face reservations from bond investors. The benchmark 10-year note’s yield hit 3% earlier this month for the first time since 1996, driven by concerns over inflation and fiscal plans, as well as expectations the Bank of Japan may need to raise interest rates more quickly.
When parliament restarts in early October, Takaichi needs to persuade lawmakers a planned sales tax cut, higher defense spending and her investment roadmap won’t undermine the finances of the world’s most indebted major economy.
While Japan’s first female leader secured her country’s largest single-party election victory since World War II in February as voters embraced her direct style, she still has doubters in the LDP where many see her as an outsider. To drive through Japan’s biggest budget on record at ¥143 trillion ($921 billion) and oversee a ¥370 trillion investment plan to enhance Japan’s growth, she’ll need their support.
Her efforts to build a stronger military got a boost this month when a candidate backed by the ruling coalition won the governor’s race in Okinawa prefecture. That builds momentum ahead of hundreds of local votes in April and Takaichi’s own bid to retain the presidency of the ruling party next September.
Takaichi also chose continuity in the LDP’s power structure. On Wednesday, she kept former premier Taro Aso, who leads the party’s only remaining formal faction, as LDP vice president, and Shunichi Suzuki - Aso’s brother-in-law and a former finance minister - as the party’s secretary-general.
"The party and government will work together to overcome difficulties and open a path to the future through our policies until the people feel a sense of prosperity and ease through economic growth,” Takaichi told reporters.
While Takaichi appears well positioned to retain power, pressing ahead with a sweeping conservative agenda - such as revising the nation’s constitution - could damage her political capital. Moves to punish national flag desecration, create a second capital to Tokyo and expand the pool of men eligible to become emperor helped bring her honeymoon period to an end, while discontent over inflation has persisted.
Takaichi remains popular among the Japanese public, said William Chou, a senior fellow at the Hudson Institute, who sees her bigger challenge as forging connections with lawmakers.
"Her long-term premiership will depend on her policies,” he added. "But also her ability to build a political base in the LDP and, most of all, taking care of her health.” - Bloomberg
