LDP–Ishin Pact Paves Way for Takaichi as Japan’s First Female Prime Minister Ahead of Diet Vote

Overview

• The cooperation deal gives the two parties 231 seats in the lower house, two short of a majority yet likely enough to win Tuesday’s prime ministerial vote decided by ballots cast.
• The pact includes timelines and concessions sought by Ishin, including a 10% reduction in the number of legislators and a two-year suspension of the consumption tax on food.
• Markets rallied on expectations of looser fiscal policy, with the Nikkei closing up 3.4% to a record as the yen weakened.
• Ishin leaders said they will not immediately take cabinet posts, preferring first to focus on implementing agreed policies.
• Even with Ishin’s backing, Takaichi must secure support from other parties to govern effectively and pass a forthcoming supplemental budget.