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3w ago

Takaichi Installs Aso Allies, Opens Coalition Talks as Markets Reprice Japan

The LDP leader is poised for a mid-October Diet vote that would make her Japan’s first female prime minister.

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Deers at Nara Park in Nara, Japan, October 6, 2025. REUTERS/Joseph Campbell
Motoko Shimada, childhood friend and primary school classmate of Sanae Takaichi, the newly elected president leader of Japan's ruling Liberal Democratic Party (LDP), speaks during an interview with Reuters at Takaichi’s constituency office in Yamatokoriyama, Nara Prefecture, Japan, October 6, 2025. REUTERS/Joseph Campbell
A graph on a screen displays Japan's Nikkei share average outside a brokerage, as the Tokyo Stock Exchange started trading after Japan's governing Liberal Democratic Party elected a new leader on October 4, outside a brokerage in Tokyo, Japan, October 6, 2025. REUTERS/Androniki Christodoulou

Overview

  • Takaichi formalized a new party lineup, naming Shunichi Suzuki secretary general and appointing Taro Aso as LDP vice president, with Haruko Arimura, Takayuki Kobayashi and Keiji Furuya to other top posts.
  • She has begun outreach to expand the ruling bloc, meeting DPFP leader Yuichiro Tamaki as Aso held separate talks with the party’s secretary general, with the LDP considering offering a ministerial post if negotiations advance.
  • Komeito leader Tetsuo Saito conveyed supporters’ concerns over Takaichi’s conservatism and warned coalition support hinges on easing those worries, including caution over Yasukuni visits.
  • Investors bet on pro‑growth policies, driving the Nikkei to record highs, pushing the yen past 150 per dollar and lifting super‑long JGB yields, though a 30‑year bond auction drew solid demand.
  • Goldman Sachs said her agenda poses upside risks to long‑end JGB yields with potential spillovers to UK and US bonds, while other analysts expect any near‑term fiscal expansion to be limited by inflation and debt constraints.