Japan’s Conservative Turn: Takaichi’s Agenda and Its Global Implications

Japanese Prime Minister Sanae Takaichi places red paper roses on winning candidates' names at LDP headquarters. Source: NBC News.

Following Japan’s lower house elections on February 8, the Liberal Democratic Party (LDP) now holds a two-thirds majority. This marks the most power any political party in Japan has had since post-World War II times. Led by the recently elected Prime Minister, Sanae Takaichi, the LDP is the political majority in the Japanese government. Campaigning on conservative ideals, Takaichi’s goals for Japan could have many implications for its citizens and relations abroad. 

Former Prime Minister and Takaichi's mentor, Shinzo Abe, implemented “Abenomics,” an economic strategy aimed to stimulate growth after years of stagnation. While successful in temporarily propelling economic growth, namely in the form of corporate profits, Abe’s policies did not create the "virtuous cycle” of sustained wage increases and consumer demand he had hoped for. Takaichi, however, now faces an economy riddled with inflation, starkly different from the deflation Abe's policies targeted. Because of these differing conditions, Takaichi must take an alternative approach from her mentor, emphasizing fiscal policy overcontinued reliance on monetary easing. Takaichi’s Fiscal Year 2026 draft budget reflects this shift through increased government spending, particularly in defense and strategic industries. Additionally, reductions in food consumption tax rates have been proposed to combat rising prices and support lower-income households. If effectively implemented, these policies could ease inflationary pressure while sustaining domestic demand, though they also risk increasing Japan’s already high public debt.

Takaichi's plan to stabilize Japan’s economy also includes expanding private-public partnerships to relieve fiscal stress, allowing for wider policy implementation. Increased cooperation between the private and public sectors could help address stagnant wage growth in Japan. If wage increases begin to keep pace with rising prices, households would experience greater purchasing power and improved financial stability. In turn, stronger domestic demand could contribute to more sustainable long-term growth, creating broader economic opportunities for Japanese citizens.

With the LDP’s recent victory giving it the House majority, the party now has a realistic opportunity to pursue its long-standing objective of constitutional revision. Takaiachi has continued to stand by this, making it clear that she plans to change Japan’s post-war pacifist image. The LDP has previously stated that they aim to make additions to Article Nine, wanting to make specifications for the Self-Defense Forces (JSDF). This will allow them to expand defense forces, which could increase nationalism within the country and enhance Japan’s ability to respond to regional threats. However, some critics view this as “militarising” Japan, which could instill uncertainty regarding Japan's intentions among surrounding countries.

Alongside prospective economic changes, Takachi’s agenda emphasizes strengthening relations with the United States. President Donald Trump has endorsed Takaichi as well as the LDP overall, signaling strong alignment between the two governments. This partnership reflects a trend of increased conservative policy priorities throughout both countries. Increased interaction between the two is already underway, as Japan has recently committed $36 billion toward several large-scale projects. This commitment is part of a larger $550 billion pledge to the United States in exchange for lower tariffs, further strengthening economic ties while reflecting mutual ideological alignment.

While showing more alignment with the United States ideologies, Takaichi’s agenda could jeopardize relations with China. Takaichi previously made comments suggesting a possible Japanese response in the event of a Taiwan contingency, signaling a more assertive regional stance. These comments have not sat well with China, raising concerns about heightened tensions and the potential for economic repercussions, including reduced trade, which could reduce the effectiveness of plans to stabilize Japan's economy. Japan relies on China for about 20% of all trade, so economic growth will be difficult to maintain if such a large partner is lost. 

Takaichi's focus on defense efforts has also stirred up possible disputes with South Korea. Japan and Korea have deep-rooted historical tensions stemming from Japan’s occupation of the Korean Peninsula in the early to mid-1900s, which means South Korea must now decide how to approach a stronger and more security-focused Japan. South Korea has risen to become an East Asian power, as a result, maintaining relations between the two countries is also essential to the success of the Japanese economy. 

Takaichi’s agenda marks a rise in conservative policy throughout Japan, and with the addition of the LDP’s house majority, many significant changes may be on the horizon. Over the course of the upcoming fiscal year, the effectiveness of Takaichi’s economic initiatives will become clearer, creating the possibility for an economic turnaround. For citizens, these policies could increase overall well-being and potentially reignite a sense of nationalism. However, the expansion of defense measures also has the potential to complicate relations with surrounding countries, raising the risk of Japan becoming involved in conflicts it has historically sought to avoid.