Hardline conservative Sanae Takaichi is set to become Japan’s first female prime minister after securing a coalition deal with the right-wing opposition Japan Innovation Party (Ishin).
Ishin leader and Osaka governor Hirofumi Yoshimura confirmed the agreement on Monday, saying, “I told Takaichi that we should move forward together.” He added that he would meet with Takaichi later in the evening to finalise the alliance.
Yoshimura and Ishin co-leader Fumitake Fujita met earlier with party lawmakers to outline the coalition framework. News of the potential deal sent financial markets surging, with the Nikkei index rising nearly 3 percent to a record high and the yen weakening, as investors anticipated expanded government spending.
The agreement gives the ruling Liberal Democratic Party (LDP) and Ishin a combined 231 seats in the lower house—two short of an outright majority but enough to secure Takaichi’s likely victory in Tuesday’s parliamentary vote to choose Japan’s next leader. She will only need a majority of votes cast in any runoff.
To govern effectively, however, Takaichi will need additional backing from smaller opposition parties, particularly to pass a supplementary budget.
The deal follows the collapse of the LDP’s 26-year alliance with Komeito, which withdrew its support after Takaichi’s election as party leader. Komeito’s exit had raised the possibility of an opposition coalition unseating the LDP for the first time in over a decade. Ishin’s decision to join forces with the ruling party now cements the LDP’s grip on power.
Takaichi, known for her fiscal stimulus stance, has called for tax cuts and higher spending to ease inflationary pressures, while criticising the Bank of Japan’s interest rate hikes. “Expectations for Takaichi’s economic policies, which include fiscal expansion and monetary easing, appear to be driving rising share prices and a weaker yen,” said Nomura Securities strategist Fumika Shimizu.
However, analysts caution that Ishin’s preference for small government and reduced spending could moderate some of her economic proposals.
On foreign and defence policy, Takaichi supports revising Japan’s pacifist constitution to formally recognise its military, increasing defence spending to counter China, and maintains her controversial practice of visiting Tokyo’s Yasukuni Shrine, viewed by some Asian neighbours as a symbol of wartime aggression.
Domestically, she has advocated for stricter immigration controls and opposes reforms allowing women to retain their maiden names after marriage, arguing that such changes undermine traditional Japanese values.
Yoshimura said Ishin would not immediately seek cabinet positions in Takaichi’s government. “We’re still a group of lawmakers with limited experience in government. For now, we’ll focus on implementing our policies within the ruling coalition rather than pursuing ministerial roles,” he told a television interviewer.
