Sanae Takaichi becomes Japan’s first female prime minister

Sanae Takaichi has made history by becoming Japan’s first female prime minister after securing a majority in the parliamentary vote. The Liberal Democratic Party leader, known for her conservative views, formed a coalition with the Japan Innovation Party to solidify her position. As Japan’s new premier, Takaichi has promised to narrow the gender gap in government and improve economic growth. She plans to appoint Satsuki Katayama as finance minister, marking another milestone for women in Japanese politics.

Takaichi inherits major economic challenges, including rising inflation, weak growth, and concerns over fiscal discipline. Analysts say her government faces delicate choices between fiscal stimulus and the risk of market volatility. Economists also note that her approach will likely differ from former Prime Minister Shinzo Abe’s Abenomics, given Japan’s shift from a deflationary to an inflationary phase.

Financial experts from UBS, Citi, and Nomura believe the new “Takaichi trade” could push the Nikkei index higher in the short term while maintaining a cautious yen outlook. Markets expect limited fiscal expansion and gradual interest rate normalisation from the Bank of Japan. Satsuki Katayama, known for being fiscally restrained, is expected to balance Takaichi’s more spending-oriented tendencies.

Diplomatically, Takaichi is preparing for talks with President Trump, where Washington may press Japan to raise defense spending and address currency weaknesses. Political analysts say her nationalist stance, including past remarks on historical sites and South Korea, could pose diplomatic challenges if pursued. Still, her election marks both a political and cultural turning point in Japan’s male-dominated establishment, with hopes that her leadership will signal meaningful reform while balancing conservative ideals with pragmatic governance.