Latest News

Takaichi is on the verge of becoming Japan’s first female Prime Minister after a coalition deal.

Sanae Takaichi, a conservative hardliner, is likely to become Japan's 1st female Prime Minister on Tuesday after the opposition Japan Innovation Party (Ishin), a right-wing party, announced that it would support her.

Hirofumi Yushimura, Osaka Governor and Ishin leader Hirofumi's representative in western Japan, told reporters that he had told Takaichi we should work together. He added that he will meet Takaichi to finalize the alliance at 6 pm (0900 GMT). Yoshimura, Ishin's boss Fumitake Fumita and party legislators met earlier at 2 pm (0500 GMT) in order to discuss the alliance. Investors' expectation of a deal which could lead to increased government spending has weakened the yen. Stocks in Japan have reached a new record high. The blue-chip Nikkei index rose almost 3% during afternoon trading.

The agreement would result in a total of 231 seats for the dominant lower house. Takaichi would still fall two seats short of a majority but it will ensure that he is likely to win a vote on Tuesday in the parliament for Japan's new prime minister. In a run-off vote, she will need only a majority rather than all votes cast.

She will need the support of all other opposition groups to govern. This includes a supplementary budget that is coming up.

The deal expected with Ishin comes after the LDP's 26 year coalition with Komeito ended when the ruling party chose Takaichi to be its new leader.

The sudden withdrawal of Komeito sparked talks between opposition parties including Ishin (the second largest), which could have derail her ambitions to become premier and put her party out from power for the very first time in over a decade. Ishin's choice to join the LDP has ended that possibility.

FISCAL DOVE AND SECURITY HAWK

Takaichi is a fiscal dove who has urged higher spending and tax reductions to cushion the consumer from rising inflation. He has also criticised Bank of Japan’s decision to increase interest rates.

Fumika Shimizu, Nomura Securities' strategist, said that expectations for Takaichi’s economic policies - which include fiscal expansion, monetary ease, and an increase in share prices - appear to be encouraging a stronger yen and higher share prices.

Analysts say that Takaichi could be restrained from spending if Ishin, a small-government and spending-cutting movement, is implemented.

Takaichi is calling for a revision of Japan's postwar constitution, which was pacifist and ignored the military. She is a frequent visitor to the Yasukuni shrine in Tokyo. This shrine, which some Asian neighbors view as a symbol for wartime aggression by Japan, wants to increase defence spending to deter China.

She also calls for stricter immigration laws and opposes policies such as allowing married women to keep their surnames, which, she claims, undermine traditional values.

Yoshimura, in an interview with television, said that for the time being, Ishin won't take up a position in Takaichi’s government until it becomes clear whether the partnership between the LDP and Takaichi is working.

"Right away, we are still a group consisting of legislators with no government experience. He said that rather than seeking a ministerial position, they wanted to focus first on implementing their policies within the ruling coalition. (Reporting from Tim Kelly, Rocky Swift and Makiko Yazaki)

(source: Reuters)