By Kung Chan, ANBOUND’s founder, and Zhou Chao, Research Fellow for Geopolitical Strategy programme at ANBOUND.
On October 4, 2025, Japan experienced a historic political milestone with the election of Sanae Takaichi as President of the Liberal Democratic Party (LDP). Now Japan’s first female Prime Minister, her rise marks a watershed moment in the country’s political history.
Takaichi has long been identified as a hardline conservative. Often compared to U.S. President Donald Trump, she has been dubbed “Japan’s Trump” for her unapologetically nationalist stance and populist overtones.
A close political ally of the late Prime Minister Shinzo Abe, Takaichi rose to prominence during his administration and was widely seen as a key figure within Japan’s conservative bloc. Following Abe’s assassination, she positioned herself as the ideological successor to his legacy, consolidating support across LDP factions. Her political agenda is firmly anchored in the far-right spectrum. She supports the continuation of “Abenomics,” advocating large-scale public spending and ultra-loose monetary policy. On constitutional reform, she seeks to revise Article 9 to formally recognize the Self-Defense Forces and insists on maintaining a patrilineal imperial succession, opposing the notion of a reigning empress. Her views on history and foreign policy are marked by revisionism, including denial of Japan’s wartime aggression, a staunchly pro-American orientation, vocal criticism of China, and a generally exclusionary stance toward immigration.
In the wake of her election, many observers anticipate that Takaichi will actively pursue the full implementation of her policy platform, effectively translating Abe’s ideological legacy into institutional form. While Takaichi’s leadership may introduce greater uncertainty into the Japan-China relationship, her policy choices will be shaped by significant structural constraints. A more meaningful shift may lie in Japan’s foreign policy trajectory toward an “Asian rebalancing”.
U.S.-Japan Relations: Strategic Priorities and Constraints
Managing relations with the United States will likely remain Takaichi’s foremost foreign policy priority. Japan’s strategic imperative is to safeguard its national security while expanding its economic and technological interests. This involves maintaining the security umbrella provided by the U.S.-Japan alliance, while seeking greater autonomy in diplomatic and economic affairs.
Takaichi is expected to pursue a stance that is firm yet strategically flexible. Rather than provoking open conflict with Washington, she may favor institutionalized, phased negotiations to manage differences on contentious issues such as defense cost-sharing, high-tech export controls, supply chain restructuring, and market access. Her likely approach would involve segmenting complex negotiations into smaller, manageable parts, leveraging public opinion and parliamentary dynamics to expand her room for maneuver.
Key constraints will include the unpredictability of U.S. domestic politics, especially the potential return of Trump-style leadership, and Japanese domestic concerns about over-dependence or excessive alignment with U.S. interests. Indicators of this policy direction may include the frequency of economic issues in bilateral talks, the public framing of defense negotiations, and the scope of reciprocal access gained in high-tech sectors.
Defense Policy: Between Deterrence and Industrial Strategy
Japan’s recent efforts to modernize and expand its defense capabilities are likely to continue under Takaichi, driven by both security concerns and industrial policy goals. Her administration may pursue multi-year defense budget commitments to reduce political friction, integrate defense procurement with industrial subsidies to localize supply chains, and promote civil-military fusion to boost high-tech industries such as semiconductors and artificial intelligence.
Key priorities may include enhancing anti-access/area-denial (A2/AD) capabilities, improving maritime and aerial intelligence systems, and strengthening reserve mobilization. She may also move to ease restrictions on arms exports, enabling greater production scale and international collaboration.
Nevertheless, significant constraints remain. Constitutional limitations, Japan’s pacifist postwar identity, fiscal sustainability, and reliance on foreign suppliers all pose barriers. The trajectory of defense policy under her leadership will likely be gradual, marked by institutional safeguards. Observables include trends in the defense budget, domestic procurement ratios, and approved arms export cases.
Taiwan Policy: Symbolism Versus Strategic Restraint
Takaichi’s longstanding pro-Taiwan stance does not necessarily portend direct confrontation with Mainland China. A more pragmatic approach may involve deepening non-military support, such as trade, civil exchanges, technological cooperation, and intelligence-sharing, while maintaining strategic ambiguity on military matters. This would allow Japan to demonstrate solidarity without crossing red lines.
Constraints here are formidable: economic retaliation from China, domestic opposition to military entanglement, and the delicate balance of alliance commitments and regional stability. Indicators to monitor include changes in exchange policies, levels of parliamentary engagement, and the nature of Japan’s involvement in crisis scenarios.
Domestic Politics and Political Longevity
Takaichi’s political survival will hinge not solely on her ideological commitments but on her capacity to deliver economic results while balancing domestic and international agendas. If she can unify the LDP through pragmatic policies that generate tangible outcomes, such as job creation, regional development, and fiscal revitalization, her tenure may well outlast Japan’s recent trend of short-lived prime ministers.
Conversely, an excessively hardline stance on controversial issues, without economic payoff, could alienate voters and provoke internal party divisions. Her likely strategy will be to incrementally advance key policies while keeping options open for retreat on high-risk issues. Variables to watch include intra-party dynamics, voting cohesion in the Diet, approval ratings, and local election results.
Japan-China Relations: Contradictions and Calculated Engagement
Takaichi’s policy stance reflects a predictable dual logic: assertiveness when domestic or alliance politics require it, and pragmatism when economic interests are at stake. China would be wise not to dismiss her as merely another hardliner. Instead, it should seek institutionalized, interest-based engagement, focusing on dialogue, technological cooperation, and shared regional challenges like climate change and economic resilience.
Yet underlying tensions, particularly historical grievances and territorial disputes, will continue to cloud the relationship. Indicators of future direction include the frequency and tenor of high-level exchanges, continuity in joint economic projects, and alignment in multilateral forums.
Toward an “Asian Rebalancing”?
Japan may increasingly pursue a recalibrated foreign policy that reduces excessive reliance on any one power and enhances its regional autonomy. This “Asian Rebalancing” does not imply a rejection of the U.S. alliance, but rather a gradual shift toward diversified diplomatic and economic engagement across Asia.
Takaichi may view regional cooperation, as with ASEAN and even China, as a way to hedge against uncertainty and assert Japan’s independent role in regional architecture. Areas of potential engagement include infrastructure, energy, climate, and technology. The extent to which this rebalancing progresses will depend on U.S. expectations, domestic political flexibility, and the broader evolution of U.S.-China competition.
Economic Focus: Abenomics Revisited
Finally, economic policy is expected to be Takaichi’s initial priority. Her first major move may be to devalue the yen, i.e., reviving the logic of Abenomics by making Japanese exports more competitive and stimulating a stock market rally. This approach, like Trump’s early economic moves, may prioritize visible, immediate impacts over complex geopolitical recalibration. It could generate short-term corporate gains and popular support, providing political capital for her broader agenda.
