On October 20, expectations of Ms. Sanae Takaichi becoming Japan's first female prime minister increased after news that her ruling Liberal Democratic Party (LDP) was about to form a new alliance with the right-wing opposition party, the Japan New Party (Ishin).
News of this potential alliance immediately pushed the Tokyo stock market to a record high, with the Nikkei index increasing by more than 2% in the early trading session.
Lawmakers in the Ishin Party are scheduled to meet today to discuss the formation of the alliance, followed by talks between Takaichi and Ishin's leaders. The alliance is expected to be completed soon.
The surprise deal with the Ishin Party comes right after the collapse of the 26-year alliance between the LDP and the Komeito Party. The Komeito Party, a moderate party with a Buddhist orientation, has decided to end the alliance after the ruling LDP elected Ms. Takaichi as its new leader.
The reason is that Ms. Takaichi is a conservative politician with a hard-line stance, going against the dovish and chuist stance of the Komeito Party.
The sudden withdrawal of the Komeito Party has caused a political crisis, which could lead to the failure of Takaichi's ambition to become prime minister and push her LDP out of power for the first time in more than a decade. However, the Ishin's decision to side with the LDP ended that possibility and paved the way for Ms. Takaichi to take power.
Ms. Sanae Takaichi is a veteran politician and one of the most prominent faces of the conservative faction in the LDP.
In terms of economy, she is considered a person following the "calf" line, that is, she supports increasing public spending and cutting taxes to support consumers in coping with rising inflation. She also criticized the Bank of Japan's decision to raise interest rates.
