Within just four months of taking office, Japan’s Prime Minister Sanae Takaichi achieved the largest landslide victory in history, outperforming any other prime minister in Japanese history. In the snap election for the House of Representatives on February 8, her Liberal Democratic Party (L.D.P.) secured 316 out of 465 seats. This is more than just a simple majority; it is a two-thirds supermajority that allows her to pass bills even if the Upper House rejects them. It is the first time a single party has reached this level in the postwar era.
On the other hand, the main opposition party, the Central Reform Alliance, saw its seats drop to 49, fewer than one-third of its previous count. They no longer hold enough seats to submit budget proposals or file no-confidence motions on their own. With such overwhelming public support, Takaichi can now push her agenda forward with almost no opposition. However, she still faces the difficult “three Ts” that could complicate her agenda.
T1: Trump
It was obvious that President Trump wanted Takaichi to remain in power. A few days before the election, he endorsed her on Truth Social and invited her to visit the White House in March. Following the vote, he congratulated her, describing her agenda as “Conservative, Peace Through Strength.”
While this friendship bolsters Takaichi’s credibility among Japanese conservatives, we cannot underestimate Trump’s next likely demands on trade and security commitments. On February 9, the Nikkei reported that the president is frustrated because the first part of the $550 billion investment in the United States, to which Japan agreed in exchange for tariff cuts under the previous Ishiba administration, has been delayed and has not yet been carried out. He has also repeatedly claimed that Japan intentionally keeps the yen weak, and that this alleged currency manipulation hurts American manufacturing exports.
Additionally, Japan’s Foreign Exchange Fund Special Account, which Takaichi is considering as a financial source, consists mostly of U.S. Treasury bonds (Japan is the largest holder of these bonds). If she were to liquidate them, it would trigger volatility in long-term U.S. interest rates, inevitably sparking a backlash from Washington. Furthermore, the deadline to decline (or accept) the invitation to the Board of Peace is also approaching.
Relying too heavily on Trump’s personal favor risks misreading his true intentions and over-promising on alliance commitment that Japan may not be able to deliver.
T2 ― Trader’s Trust
Financial markets remain skeptical of Takaichi’s fiscal approach. Since she took office as L.D.P. president last October, the yen has dropped roughly 7.5% against the dollar. One of the key drivers is her first and foremost pledge for “responsible, proactive fiscal policy,” which combines tax cuts with increased spending. In particular, her proposal to suspend the 8% consumption tax on groceries for two years without specifying a funding source has rattled the bond market. After the proposal was released, long-term interest rates on government bonds were pushed to 2.38%, a level not seen in 27 years.
Furthermore, despite the efforts of financial authorities in Tokyo and Washington to correct speculative yen selling and stabilize the exchange market by performing a rate check in late January, during the election campaign, Takaichi told voters that a weak yen has “favorable” aspects and described the Foreign Exchange Fund Special Account as feeling “flush” with cash. These comments triggered another sharp sell-off of the yen.
Analysts warn that this expansionary stance, possibly lacking fiscal discipline, could cause a triple collapse in yen, bonds, and stocks, similar to “Truss shock” the U.K. experienced in 2022. If markets conclude that Takaichi’s policies will further worsen Japan’s record government debt, a sudden loss of confidence could drive inflation well beyond the current 3%. Ultimately, market distrust could undo her political achievements in an instant.
T3 — Takaichi Herself
Takaichi is Japan’s first female prime minister. Her personal brand strongly attracts wide support, particularly with younger voters. This popularity gives her the political capital to sweep away long-simmering controversial issues. For example, she places constitutional reform at the core of her agenda. The L.D.P. and its new coalition partner have agreed to suggest rewriting Article 9 of the Constitution, which defines pacifism and the non-maintenance of military forces, to explicitly recognize the Self-Defense Forces (S.D.F.) and add an emergency clause. Her defense agenda also includes relaxing the third of the “Three Non-Nuclear Principles” (not possessing, not producing and not allowing nuclear weapons in Japan) and arms export controls, while initiating discussions on acquiring nuclear-powered submarines and revising key national security documents. Domestically, she has signaled a tougher stance on foreigners and immigration, warning foreign residents to “adapt” to Japanese norms. She also aims to overhaul Japan’s intelligence apparatus, proposing the creation of a new national intelligence secretariat and passing a counter-espionage act. As is widely understood, China is at the heart of many of these initiatives; at the same time, however, concerns have been voiced regarding the protection of civil rights and the heightening of unwarranted security tensions in East Asia.
While this hardline stance satisfies her conservative base, not a few bureaucrats and policymakers in Tokyo are increasingly uneasy with the provocative rhetoric used by Takaichi and her inner circle when framing these controversial issues. For example, her comments last November regarding a “Taiwan contingency,” in which she explicitly discussed S.D.F. involvement in a way that bypassed the “unspoken boundaries” long and strictly maintained by the Japanese foreign ministry officials, drew a furious response from Beijing.
Such erratic remarks are also drawing attention in U.S.–Japan relations. In December, when a special advisor to the prime minister in charge of nuclear disarmament and nonproliferation issues shared the idea of Japan arming itself with nuclear weapons, a spokesperson for the US State Department responded by remarking that “Japan is a global leader and a valuable partner to the United States on nuclear nonproliferation and advancing nuclear arms control,” signaling that Washington would not tolerate any Japanese deviation from the N.P.T. system.
During her L.D.P. leadership campaign last October, Takaichi also confused the Japanese public by invoking unverified claims about foreign tourists kicking deer in Nara to justify her restrictive immigration policy.
Certainly, her phrasing is refreshing, straightforward, and seemingly unconstrained by taboos. However, without deliberate public opinion building, diplomatic signaling, and strategic communication, even policies with significant value for her could be damaged by a fierce blowback, risking Japan’s overall interests and stability.
Ultimately, the L.D.P.’s two-thirds super-majority in the lower house grants Takaichi nearly unchecked legislative power. She has the authority to pass almost any bill she desires, and maintaining the image of a strong leader is beneficial to her diplomatic capacities, or being a good friend to the U.S. However, whether or not this power leads to a lasting legacy depends on her ability to manage these pitfalls. Her success hinges on navigating these three Ts; strategic risks without stumbling.
Edited by: Connor Hartigan