{"id":92278,"date":"2025-10-21T14:33:15","date_gmt":"2025-10-21T14:33:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/92278\/"},"modified":"2025-10-21T14:33:15","modified_gmt":"2025-10-21T14:33:15","slug":"what-to-expect-for-japans-economy-under-leader-takaichi","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/92278\/","title":{"rendered":"What to expect for Japan\u2019s economy under leader Takaichi"},"content":{"rendered":"

Share prices have soared recently in Tokyo on hopes that conservative lawmaker Sanae Takaichi,<\/a> who was chosen <\/a>as Japan\u2019s first female prime minister, will double down on market friendly policies, including hefty spending on defense and cheap credit.<\/p>\n

The benchmark Nikkei 225 stock index climbed close to the symbolically important 50,000 level, gaining 0.7 percent to 49,517.57. Takaichi, a motorbike and heavy metal enthusiast, prevailed in a Lower House parliamentary ballot that gave her 237 votes, above the 233 votes required to win.<\/p>\n

Here\u2019s what might be expected from what has been dubbed \u201cSanaenomics:\u201d<\/p>\n

Increases in consumer prices have surpassed the Bank of Japan\u2019s 2-percent target range at 2.5 percent to 3 percent. So the central bank is gradually raising rates<\/a> from their longstanding level near or below zero.<\/p>\n

Wages remain near the level they were at 30 years ago, only topping the 1997 average level in 2024 for the first time. Meanwhile, low rates have helped to keep the Japanese yen weak against the dollar, amplifying inflation since much of what Japan consumes is imported.<\/p>\n

\u201cI want to focus first on dealing with rising consumer prices,\u201d Takaichi told reporters after she was elected head of the ruling Liberal Democratic Party earlier this month, putting her in line to replace departing Prime Minister Shigeru Ishiba.<\/p>\n

Takaichi has indicated she opposes raising interest rates. The promise of continued cheap credit is one reason share prices have shot higher. But keeping rates low will hinder efforts to curb inflation and to strengthen the yen.<\/p>\n

Echoing many of her predecessors\u2019 promises, Takaichi also has vowed to deliver wage increases, without saying how she intends to do that.<\/p>\n

Japan\u2019s population has been shrinking and rapidly aging for years, leading to labor shortages and undermining the country\u2019s potential economic growth.<\/p>\n

Although she is an unabashed conservative on most social issues, Takaichi has said she favors giving tax incentives to companies that provide child care facilities to their employees and possible tax breaks for family spending on child care.<\/p>\n

It\u2019s unclear what more the government might do under any leader to counter the low birthrate, which partly reflects the financial difficulties of raising and educating children when wages fail to keep up with inflation. It also reflects a corporate culture that is not conducive to a family-friendly work-life balance.<\/p>\n

Takaichi is expected to emulate the policies of her late mentor, former Prime Minister Shinzo Abe<\/a>. He stepped down in 2020 and was assassinated<\/a> in 2022. His \u201cAbenomics\u201d approach included promises of cash handouts and boosting government spending, despite a national debt that is nearly triple the size of the economy.<\/p>\n

Like Abe, she is hawkish on defense. Her political ascent has spurred heavy buying of shares in military-related companies such Mitsubishi Heavy Industries, Yaskawa Electric and Japan Steel Works.<\/p>\n

Takaichi is bound to seek cordial relations with U.S. President Donald Trump, just as Abe did, and to strengthen Japan\u2019s security alliance with Washington. They are expected to meet later this month.<\/p>\n

Initially Takaichi said Japan might want to rethink its pledge of $550 billion to the Trump administration<\/a>, part of a deal that helped lower U.S. tariffs on imports from Japan. She later said she would honor the agreement, despite public disapproval over handing over Japanese taxpayers\u2019 money to Washington.<\/p>\n

Takaichi will be confronting problems that have confounded Japan\u2019s leadership for decades. Any major reforms would face resistance from entrenched vested interests.<\/p>\n

The tenures of Japanese prime ministers tend to be short and vulnerable to feuding between party factions and the hereditary political fiefdoms that control most seats in parliament.<\/p>\n

To win the Oct. 21 parliamentary vote, the LDP forged an alliance with the Nippon Ishin (Japan Innovation Party), a libertarian opposition group based in Osaka.<\/p>\n

But Takaichi likely will need support from lawmakers belonging to other parties in the fractious and splintered opposition to pass legislation. They span the spectrum from the Japanese Communist Party on the far left to Sanseito and others on the extreme right.<\/p>\n

Takaya Suzuki, who runs a restaurant and real estate business, supports one of the smaller nationalist-leaning opposition parties called the Conservative Party of Japan, whose policies are similar to Takaichi\u2019s. He admires Trump and says he\u2019s rooting for Takaichi.<\/p>\n

But, he added, \u201cEven if she tries her best, it\u2019s going to be tough.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Share prices have soared recently in Tokyo on hopes that conservative lawmaker Sanae Takaichi, who was chosen as…\n","protected":false},"author":2,"featured_media":92279,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[26785,138,219,1759,111,43,139,69,135],"class_list":{"0":"post-92278","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-asahi-shimbun","9":"tag-business","10":"tag-economy","11":"tag-japan","12":"tag-new-zealand","13":"tag-news","14":"tag-newzealand","15":"tag-nz","16":"tag-politics"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/92278","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=92278"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/92278\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/92279"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=92278"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=92278"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=92278"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}