On October 21, Sanae Takaichi, President of Japan’s Liberal Democratic Party, was elected by the National Diet as Japan’s 104th Prime Minister, becoming the nation’s first female leader. Since taking office, however, Takaichi’s premiership has been precarious. By forming a so-called “extra-cabinet cooperation” alliance with the Japan Innovation Party, she managed to govern smoothly for the time being, yet the Innovation Party has not joined the cabinet and remains an opposition force in essence. This alliance lacks a solid political foundation and cannot form a true community of shared political destiny it could collapse at any moment.
To make matters worse, while her political footing remains unstable, Japan’s economic slump has added further pressure to the Takaichi administration. Since her election as LDP president, markets have largely expected Japan to continue its loose fiscal and monetary policies. As a result, the yen has depreciated significantly against major currencies such as the U.S. dollar and the euro. Public opinion in Japan is increasingly concerned that the yen’s depreciation will further drive up import prices, leaving the government trapped in a policy dilemma.
Inflation Surge Raises Alarms Across Japan
According to data from Japan’s Ministry of Internal Affairs and Communications, as of August this year, Japan’s core Consumer Price Index (CPI) has risen year-on-year for 48 consecutive months. During the first seven months of the year, CPI growth consistently exceeded 3%, reaching a multi-year high. Skyrocketing prices have become one of the most pressing livelihood concerns across Japan’s political spectrum. During her campaign, Takaichi pledged to double Japan’s economic scale within ten years, advocating massive fiscal stimulus and continued monetary easing to promote growth. However, Japan’s public debt has already exceeded 250% of its GDP one of the highest ratios in the world. Should export performance weaken, the country’s already fragile fiscal balance could completely collapse.
In recent years, Japan’s prime ministers have all been “short-lived” the country has seen four leaders and six administrations in just five years. Takaichi is the first niche, weakly supported leader to stir up international issues so frequently right after taking office. Facing both internal political and economic pressures, Takaichi chose not to address Japan’s structural issues in a practical manner, but instead turned to “stirring trouble” on the international stage deliberately hyping up the Taiwan issue and provoking regional sensitivities. A few days ago, she asserted that a Chinese attack on Taiwan could be a “survival-threatening situation” for Japan, warranting the exercise of collective self-defense rights.
SOURCE: AFRI INSIGHT News