Japan’s ruling party elects Sanae Takaichi as new leader, likely to become first female PM

Sanae Takaichi has been elected leader of Japan's ruling Liberal Democratic Party, positioning her to become the country's first female Prime Minister. A hard-line conservative and China hawk, Takaichi prioritizes strengthening the Japan-U.S. alliance, increasing defense spending, and fostering a free and open Indo-Pacific. Her leadership aims to restore LDP support following recent election losses, though her ultra-conservative stance may introduce diplomatic complexities with Asian neighbors, alongside domestic challenges like inflation.

Analysis

Japan’s ruling party elects Sanae Takaichi as new leader, likely to become first female PM The hard-line ultra-conservative and China hawk has said that ensuring the Japan-U.S. alliance is her top diplomatic priority. Sanae Takaichi, the newly-elected leader of Japan's ruling party, the Liberal Democratic Party (LDP), attends a press conference after the LDP presidential election in Tokyo, Oct. 4, 2025. | Pool photo by Yuichi Yamazaki TOKYO — Japan’s governing party on Saturday elected former Economic Security Minister Sanae Takaichi, a hard-line ultra-conservative and China hawk, as its new leader, making her likely to become the country’s first female prime minister. In a country that ranks poorly internationally for gender equality, the 64-year-old Takaichi makes history as the first female leader of Japan’s long-governing conservative Liberal Democratic Party. Takaichi is one of the most conservative members of the male-dominated party. An admirer of former British Prime Minister Margaret Thatcher, Takaichi is a protege of former Japanese Prime Minister Shinzo Abe ‘s ultra-conservative vision and a regular at the Yasukuni Shrine, seen as a symbol of Japan’s wartime militarism, which could complicate Tokyo’s relations with its Asian neighbors. Takaichi beat Agriculture Minister Shinjiro Koizumi, the son of popular former Prime Minister Junichiro Koizumi, in a runoff in a vote by the LDP on Saturday. Takaichi replaces Prime Minister Shigeru Ishiba as the party hopes to regain public support and stay in power after major election losses. She is likely to be Japan’s next prime minister because the party remains by far the largest in the lower house, which determines the national leader, and because opposition groups are highly splintered. ”Now that the LDP has its first female president, its scenery will change a little,” Takaichi said as she tried out the president’s chair. Takaichi vows to strengthen Japan-US alliance Takaichi later said she will immediately work on stemming rising prices, while also focusing on diplomatic and security challenges. A parliamentary vote is expected in mid-October. The LDP, which has been criticized by opposition leaders for creating a prolonged political vacuum, said Takaichi needs to hurry because the winner will soon face a diplomatic test: a possible summit with U.S. President Donald Trump, who could demand that Japan increase its defense spending. A meeting is reportedly being planned for late October. Trump will travel to the Asia-Pacific Economic Cooperation summit in South Korea starting Oct. 31. Takaichi said ensuring the Japan-U.S. alliance is her top diplomatic priority. “It is essential to ... confirm the reinforcement of the Japan-U.S. alliance,” she said. Takaichi stressed the importance of their cooperation through three-way frameworks that also include regional partners such as South Korea, Australia and the Philippines, pledging Japan’s greater role in achieving a free and open Indo-Pacific. She said she respects all tariffs and investment agreements struck between Tokyo and Washington under the Ishiba government. Takaichi faces major domestic challenges The LDP, whose consecutive losses in parliamentary elections in the past year have left it in the minority in both houses, needs its new leader to quickly bring back voter confidence and stability and to address challenges in and outside Japan. Takaichi will also need cooperation from key opposition groups to implement her party’s policies. Ishiba, who achieved a 15% tariff deal with Washington and put Japan’s ties with South Korea and other Asian countries on track during his one-year stint, said “I hope the LDP will band together under new (party) president Takaichi to serve for the country and the people, as well as the world and for the new era.” Ishiba, a centrist known as archrival of Abe, was virtually forced into resigning by ultra-conservative wings in the party. There were five candidates for the job Five candidates — two currently serving and three former ministers — vied for the LDP presidency. Saturday’s vote only involved 295 LDP parliamentarians and about 1 million dues-paying members. It only reflected 1% of the Japanese public. The LDP’s choice of Takaichi, instead of the more centrist-to-liberal Koizumi, apparently underscores the party’s hope to win back conservative voters who supported emerging far-right groups such as Sanseito in the July parliamentary election. But the LDP also needs help from the opposition, which it has long neglected. The party will likely look to expand its current coalition with the moderate centrist Komeito with at least one of the key opposition parties, which are more centrist. Takaichi shied away from conservative views in campaign Takaichi like other candidates called herself a “moderate conservative” during the run-up to the election to show their willingness to work with the opposition and stayed away from stressing her opposition to liberal social issues or anti-China policies. Takaichi on Saturday said the Yasukuni issue should not be a diplomatic issue and that she will think about how she can “pay respect to the war dead and pray for peace.” She supports bigger fiscal spending for growth, a stronger military and cybersecurity, as well as tougher regulations on increasing foreign tourists and laborers. She was criticized for citing unconfirmed reports to slam foreigners for kicking deer in Nara, her hometown, and saying many foreign law offenders escaped indictments due to a shortage of translators. Experts say candidates avoided discussing their usual political views on historical issues, same-sex marriage and other contentious topics, including the party’s political funds scandal, which was the biggest reason for their election losses, and anti-corruption measures. Their avoidance of these subjects raised doubts over the party’s ability to regain public trust, analysts said. Voters in downtown Tokyo said they hoped that Takaichi, as first female leader, will bring changes. “I do have expectations,” said Masami Nakagawa, though he expressed concern about her past nationalist comments. “I’m hopeful that she’ll develop a stronger sense of balance once she becomes prime minister.” - Filed Under: - Japan Global Security Free through the end of 2025, this POLITICO Pro newsletter preview explores the people, policies, and power shifts shaping today’s international security landscape. The election of Sanae Takaichi as leader of Japan's Liberal Democratic Party signals a significant pivot towards a more conservative, hawkish geopolitical and domestic policy framework. As the presumptive Prime Minister, her stated top priority is reinforcing the Japan-U.S. alliance, which, coupled with expected pressure from Washington, points toward a likely increase in defense and cybersecurity spending. This hard-line stance, particularly towards China, and her association with the Yasukuni Shrine, introduces a material risk of heightened diplomatic friction with key Asian neighbors, contrasting with the more conciliatory approach of her predecessor. Domestically, Takaichi plans to counter rising prices with increased fiscal spending, a move that could stimulate growth but also poses inflationary risks. However, her policy ambitions are constrained by the LDP's recent election losses, leaving it in a minority in both houses of parliament. This political reality necessitates cooperation with more centrist opposition parties, which may moderate the implementation of her more ultra-conservative agenda, a possibility she acknowledged by softening her rhetoric during the campaign.

Key Decisions for Investors

• Investors should monitor Japanese defense and cybersecurity-related equities for potential upside, as Takaichi's administration is expected to increase national security expenditures.
• Positions with significant exposure to China and South Korea should be reviewed, as Takaichi's hawkish foreign policy and nationalist gestures could introduce geopolitical volatility and impact regional trade relationships.
• Consider the inflationary implications of proposed fiscal expansion; while potentially a tailwind for domestic-focused industries, it could pressure the yen and prompt a response from the central bank.
• Pay close attention to the formation and composition of the new coalition government, as the LDP's need for centrist partners will be a key determinant of the administration's ultimate policy direction and stability.