Japanese Politics Updates – October 26, 2025

Weekly Briefing Synopsis: Takaichi Takes the Helm Amid Fragile Coalition and Global Flashpoints

Good morning, and welcome to a recap of Japanese Politics One-on-One Episode 246, the source for unfiltered analysis of Japan’s political landscape. Aired live on YouTube, Facebook, LinkedIn, and Clubhouse, the show has been on air for nearly five years. It delivers ahead-of-the-curve insights every Sunday. This week’s October 26 broadcast comes as Prime Minister Sanae Takaichi, Japan’s first female leader, navigates a fragile coalition, a high-stakes Trump visit, and escalating regional threats.

Takaichi’s First Week: Cabinet, Policy, and a Fragile Coalition

Sanae Takaichi became Japan’s 104th post-war prime minister on October 21, securing victory in a tight Diet vote. The Liberal Democratic Party (LDP), with 191 seats, partnered with Nippon Ishin no Kai (41 seats) to form a loose alliance. Totaling 232, this coalition still short of a Lower House majority (233). Ishin declined cabinet posts, preserving flexibility to criticize or exit, a strategic move that keeps the LDP on edge.

Takaichi announced her 19-member cabinet on October 21 and delivered her policy speech on October 24. Key appointments reflect factional balance: Seiwa-kai (6 seats), despite past scandals, and Aso’s group (2 high-level non-Cabinet roles, including his brother-in-law as Chief Cabinet Secretary). Ishin extracted major concessions. Among them are a 10% Diet seat reduction (targeting Komeito’s former strongholds), Osaka as Japan’s secondary capital, and free education through high school. These demands, to be addressed in the 53-day extraordinary Diet session ending December 13, underscore the coalition’s fragility.

The LDP’s pivot from Komeito’s 26-year pacifist alliance to Ishin’s conservative reformism signals a bolder agenda. It contains constitutional revision, accelerated defense spending (2% of GDP by 2028, now targeted for 2027), and economic diversification beyond autos.

Diet Dynamics: Lower House Rules

The extraordinary Diet session opened October 21 with Emperor Naruhito presiding. Shigeru Ishiba resigned at 3 PM, triggering the prime ministerial vote. Takaichi won on the first ballot, backed by Ishin. The Lower House’s supremacy (its vote overrides Upper House objections) ensures LDP control on key legislation, despite lacking a majority in either chamber (Upper House: LDP-Ishin short by 5 seats).

The session prioritizes a supplemental budget, gasoline tax relief, and stimulus to stabilize Takaichi’s administration. A snap election remains unlikely; the public and markets favor stability over yet another national vote.

Economic Signals: Yen, GDP, and Stimulus

The yen closed at 152.82/USD on October 25, down 0.17% daily but up 1.96% monthly, reflecting coalition uncertainty. The IMF revised Japan’s 2025 GDP growth to 1.2% (from 0.6%), but inflation (2.3%) and stagnant wages (-1.4% year-on-year) persist. Unemployment holds at 2.5% with 1.3 million vacancies. A stimulus package in the Diet session aims to counter yen volatility and support Takaichi’s early tenure.

Geopolitical Flashpoints: North Korea, Russia, China

North Korea fired multiple short-range ICBMs on October 22. This is a deliberate signal amid Takaichi’s rise (the day after her election as Prime Minister!). Russia blocked innocent passage in the Northern Territories, escalating tensions over Japanese investments in Sakhalin-2 (7-8% of Japan’s energy). China’s Coast Guard incursions near the Senkakus hit a monthly high, with armed vessels prompting Japanese scrambles.

President Trump’s October 27-29 Japan visit, three days of summitry, imperial audience, and Quad presser at Yokosuka, will dominate the news. Takaichi pledged to accelerate defense spending to 2% of GDP by 2027 and import 350 F-150 trucks as a gesture. Trump departs for APEC in South Korea on October 30 (as does PM Takaichi), where a Xi Jinping sideline chat is possible. His Budapest meeting with Putin looms over Ukraine but likely off the tables as of this reporting.

Trump-Takaichi Summit: What to Watch

Takaichi’s October 25 nighttime call with Trump was guaged as “constructive.” Expect the face-to-face to focus on:

• Quad expansion and export controls
• Japan’s $550 billion U.S. investment pledge
• Tariff relief and F-150 imports A strong joint statement could cement Takaichi’s leadership and stabilize markets.

Questions From The Audience

• Is the high debt to GDP ratio a central factor in Japan’s Ministry of Finance bureaucracy being able to veto most changes suggested by politicians in tax and fiscal policy? In Japan it is about 250% while in the US it is about 125%. Has there ever been a time when the Ministry of Finance has not been central to policymaking?
• Could you explain why you think Ishin made an alliance with LDP but did not join the cabinet? Is it as some suggest that Ishin wants to take credit for successes but leave the blame for failures to Ms. Takaichi?
• Will the issue of the Ishin party’s 10% reduction of Diet members’ seats become a reality? If so, what impact might it have on the minor parties such as Hoshuto, Sanseito, and Shaminto?
• Ishin-no-kai as part of their deal to support the LDP has proposed designating Osaka rather than Tsukuba as Japan’s secondary administrative hub in the event of a major earthquake disabling Tokyo. Considering the significant seismic and tsunami risks posed by a potential Nankai Trough earthquake affecting areas between Tokyo and Osaka as well as the ongoing risk of a major event in the Kanto region, what are the potential implications of this proposal for Japan’s disaster resilience, political continuity, and regional development planning?
• Will the Benkyokai go away as part of the LDP agreement with Ishin as part of their 12 concessions?
• Is Aso happy sitting back and playing the power broker and not taking a cabinet role for himself or was it a tradeoff to get Takaichi in as prime minister?

In Closing

Japan stands at a crossroads with Takaichi’s leadership, a fragile LDP-Ishin coalition, and a pivotal Trump visit. As regional threats mount, Tokyo’s stability is paramount. Join us next Sunday at 8:20 AM JST for Episode 247 to dissect the summit outcomes and cabinet performance. Share if insightful, and subscribe for more.

Thank you for reading! Subscribe for free to receive new posts and support our work.