Tokyo, Japan — Japanese Prime Minister Sanae Takaichi led her ruling coalition to a landslide victory in Sunday’s general election, securing a powerful mandate that clears the way for tax cuts and higher military spending aimed at countering China, policies that have already unsettled financial markets.
Projections showed Takaichi’s Liberal Democratic Party winning up to 328 of the 465 seats in the lower house of parliament. The LDP alone crossed the 233-seat threshold needed for a majority less than two hours after polls closed. With coalition partner the Japan Innovation Party (Ishin), the ruling bloc is set to command a supermajority, according to projections by public broadcaster NHK.
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A conservative who says she is inspired by Britain’s “Iron Lady” Margaret Thatcher, Takaichi is Japan’s first female prime minister. Her decisive win follows months of political turbulence under her predecessor, Shigeru Ishiba, during which the LDP lost control of both houses of parliament.
Outside a polling station in Uonuma, a snowbound town in Niigata prefecture, voter Kazushige Cho, 54, said Takaichi had given the country a renewed sense of direction. “It feels like the whole country is pulling together and moving forward,” he said.
Markets have reacted nervously to Takaichi’s campaign pledge to suspend the 8% sales tax on food to help households cope with rising prices. Investors remain concerned about how Japan, which carries the heaviest debt burden among advanced economies, would fund the measure. Takaichi has said she will speed up consideration of the tax cut while keeping fiscal sustainability in focus.
Chris Scicluna, head of research at Daiwa Capital Markets Europe, said the plan leaves “big question marks about funding and how the arithmetic will add up.”
Japan’s top business lobby, Keidanren, welcomed the election result, with chairman Yoshinobu Tsutsui saying the outcome restored political stability at a critical moment for the economy.
Takaichi’s strong mandate is also expected to have significant geopolitical implications. U.S. President Donald Trump last week gave her a “total endorsement” and said he would host her at the White House next month.
China is also closely watching the outcome. Weeks after taking office, Takaichi triggered Japan’s most serious dispute with Beijing in more than a decade by publicly outlining how Tokyo might respond to a Chinese attack on Taiwan. China responded with economic countermeasures, including discouraging its citizens from traveling to Japan.
Japan’s Defence Minister Shinjiro Koizumi said on Sunday that he wants to push ahead with policies to strengthen Japan’s defences while continuing dialogue with China.
“Beijing will not welcome Takaichi’s victory,” said David Boling, principal at the Asia Group. “China now faces the reality that she is firmly in place — and that efforts to isolate her have failed.”
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