Japan, explained.
Prime Minister Sanae Takaichi speaks during a press conference on consumption tax reduction to 1% from 10% for two years at the prime minister's office 31 July 2026 in Tokyo, Japan (The Asahi Shimbun via Getty Images)
Japan’s prime minister faces no election for years, but her economic agenda still has everything to prove.
Subscribe to The Informer for monthly expert analysis, and to Events for advance notice of visiting world leaders and distinguished guests.
You may unsubscribe from Lowy Institute newsletters at any time. For information on our privacy practices and how to unsubscribe, see our Privacy Policy.
Sanae Takaichi’s strong poll position masks a brittle mandateSanae Takaichi’s strong poll position masks a brittle mandate
Sanae Takaichi’s decision to dissolve the Lower House in January 2026 returned the Liberal Democratic Party with 316 seats – the largest single-party result of the postwar era, above the two-thirds mark in the House of Representatives. Takaichi faces no scheduled national election until the House of Councillors election of July 2028, and none for the lower house until February 2030 unless she calls one.
Six months in, her government has pushed through the most substantial reorganisation (Opens in new window) of Japan’s intelligence agency in the post-Second World War era: the National Intelligence Bureau bill cleared the lower house in April, and the body was established on 31 July under a prime minister-chaired National Intelligence Council with a foreign intelligence agency and anti-espionage legislation (Opens in new window) to follow. Diplomatically, Takaichi’s visit to Vietnam and Australia produced economic-security agreements, framed within an "evolved (Opens in new window)" Free and Open Indo-Pacific.
Her strongest constitutional weapon is one hard to reach for.
The question for the next two years is whether she can renew her mandate on terms good enough to accumulate political capital on anything difficult.
The obvious comparison is Shinzo Abe, who consolidated his second premiership by returning repeatedly to the electorate. Abe won six national elections between 2012 and 2020, two of them dissolutions he called himself. What mattered was the rhythm: an electoral verdict roughly every 18 months, each one convertible into intra-party authority.
The seat position also differed. When Abe passed the peace and security legislation in 2015, he worked from a two-thirds coalition majority in which the LDP alone fell well short, and Komeito’s assent shaped (Opens in new window) the legislation’s design.
Takaichi’s 316 is a single-party two-thirds – stronger on paper, but more brittle. Abe’s baseline was repeatable (291 in 2014, 284 in 2017). Takaichi’s was produced by an opposition collapse: the newly merged Centrist Reform Alliance, formed in January by CDP and Komeito lower house members, fell to 49 seats from the 167 the two parties had held. That can be a peak, not a floor.
This creates a dissolution dilemma. Even if Takaichi understands that the key to Abe’s longevity was accumulating small electoral winnings, any election she calls will very probably return fewer LDP seats, and the shortfall will be read inside the party as a personal verdict, causing a headwind for Takaichi in the autumn 2027 LDP presidential race. With cabinet approval falling for a third month – 48.4% (Opens in new window) in Jiji’s August survey – her strongest constitutional weapon is one hard to reach for.
Shibuya crossing in Tokyo (Vlad D/Unsplash)
The upper house compounds the problem. Because half the chamber is renewed every three years, the seats contested in July 2028 are those won in 2022 – the LDP’s strong cohort, when it took 63 of 125. The weak 2025 cohort, in which the party won only 39, is not up again until 2031. The LDP defends a high-water mark with no chance to recover the ground lost under Ishiba.
A single-party upper house majority is arithmetically out of reach: it would require roughly 86 contested seats, against a postwar single-election maximum of 72 in 1986. But a single-party majority has not been the operative question. What matters is whether the LDP–Ishin coalition holds a working majority in the upper house and keeps the two-thirds majority in the lower house – and that makes Takaichi more dependent on her coalition partner through 2027, not less.
For security policy, dependence on Ishin is arguably an improvement on what preceded it. Komeito functioned for two decades as a brake on defence and constitutional questions; Ishin does not. Ishin’s executives recently visited Australia (Opens in new window) to research intelligence and defence-industry ties. The limit is Ishin’s own weight: it added little in February and mobilises poorly outside Kansai, so the coalition’s upper house arithmetic in 2028 rests mostly on the LDP.
Abe’s longevity was underwritten by Abenomics – monetary easing, fiscal stimulus and structural reform aimed at ending deflation. This is another formula Takaichi cannot simply reuse (Opens in new window). As of August 2026, Japan recorded 1.9% (Opens in new window) consumer price inflation, meaning Japan is no longer in deflation.
Japan’s 1.7% real wage growth, positive for seven consecutive months, supported by three consecutive quarters of economic growth, most recently 0.3% in April–June are not bad compared to Europe’s 0.4%, the United States’ 0.4% and Australia’s 0.3% in the same period.
The difficulty is the trend beneath it. Japan’s potential growth rate (Opens in new window) remains around 0.4 per cent, against roughly 2.3% in the United States, and 1.3% in the United Kingdom. Takaichi’s growth strategy (Opens in new window) rightly identifies AI adoption, R&D, startups and frontier sectors – and the first postwar reduction in the consumption tax may stimulate demand. But supply-side reforms (Opens in new window) – ending tax relief for inefficient firms, deregulation, subsidising automation in labour-short sectors –which can improve the long-term economic potential, costs jobs on rural and small-business constituencies the LDP-Ishin coalition relies on.
Takaichi inherits the two conditions that carried Abe (Opens in new window): a threat environment that makes her security agenda legible, and an opposition too divided to present an alternative. In February, however, LDP got over 80% of seats (Opens in new window) in single-member constituencies with only 50% of the vote. Takaichi’s longevity will depend on making her economic agenda equally visible, and on tangible results well to enable her to call snap election before the LDP presidential election in the autumn of 2027.
About the author
Ryosuke Hanada
Ryosuke Hanada is a research student at Macquarie University from 2021, working on International security, Japan's foreign policy and Indo-Pacific/Pacific Islands.
The most-pressing world events explained by Lowy Institute experts and global contributors, in your inbox, every Thursday.
You may unsubscribe from The Interpreter at any time. For information on our privacy practices and how to unsubscribe, see our Privacy Policy.
