Japan’s ruling Liberal Democratic Party (LDP) elected former Economic Security Minister Sanae Takaichi as its new leader, positioning her to become the country’s next prime minister in a parliamentary confirmation vote expected in mid-October.
Takaichi, 64, a staunch conservative and vocal China hawk, defeated her moderate rival Shinjiro Koizumi by 185 votes to 156 in a runoff at LDP headquarters in Tokyo. The victory makes her Japan’s first female party president and, almost certainly, its first female prime minister since the LDP remains the largest bloc in parliament and opposition parties are too fragmented to mount a united challenge.
As Goldman trader Ippei Yamaura writes, the outcome was a shock: “Before the election began, polymarket were pricing an 80%+ probability of a Koizumi victory. Odds for Koizumi dipped somewhat as local vote tallies came in, but most observers still viewed developments as broadly in line with expectations. Betting markets held around 60–80% until the first-round result was released. The first-round outcome was largely in line with expert expectations (arguably a touch less favorable for Takaichi), and betting markets again raised the implied probability of a Koizumi win. However, in the runoff, Takaichi secured more Diet member votes than anticipated, reportedly with support from the Aso faction. Some Diet members who had backed Hayashi were also said to have shifted to Takaichi, as Hayashi did not whip his supporters for the runoff. Virtually no one—including media, political analysts, opposition parties, and even LDP insiders—had expected this result (and myself).”
Moments after the result was announced, Takaichi called for unity and renewal inside a party battered by scandal and electoral setbacks. “Rather than feeling happy right now, I feel real challenges lie ahead,” she said. “We must all pull together across all generations and work as one to rebuild the LDP. Everyone will have to work like a horse.”
The leadership race followed deeply unpopular Prime Minister Shigeru Ishiba’s resignation in early September after a year in office and two election defeats due to a stagflationary debacle culminating in soaring prices (of mostly food products) and a deteriorating economy. The handover comes at a time of economic uncertainty, social transformation, and mounting geopolitical tensions across the Asia–Pacific region.
Takaichi, the pro-stimulus and anti-immigration conservative poised to become Japan’s first female prime minister widely viewed as Abe 2.0, is an energetic nationalist with a soft spot for the hard-nosed politics of Iron Lady Margaret Thatcher and the heavy metal music of Iron Maiden. In choosing the former economic security minister as its leader, the Liberal Democratic Party is essentially betting on a swing back to the right to attract the younger voters who have flocked to smaller populist outfits, including the arch-conservative Sanseito party.
It’s a move that could backfire if the party is seen simply reverting to the easy money and hawkish diplomacy of her mentor, former Prime Minister Shinzo Abe, without any new ideas.
An admirer of former British Prime Minister Margaret Thatcher and protégé of the late Shinzo Abe, Takaichi has championed Abe’s conservative agenda and frequently visited the Yasukuni Shrine, a flashpoint in Japan’s relations with its Asian neighbors, primarily China. Her win is expected to reassure the LDP’s nationalist base but will complicate diplomacy with China and South Korea.
