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Ronny P. Sasmita

Sanae Takaichi’s victory in Japan’s Liberal Democratic Party (LDP) leadership race marks not just the rise of the country’s first female prime minister in waiting, but also a symbolic shift in Japan’s ideological compass.
Long known as a staunch conservative and nationalist, Takaichi’s ascent signals the possible end of the centrist pragmatism that characterised the Shinzo Abe and Fumio Kishida years. Her win sets Japan on a trajectory that could reshape its domestic economy, foreign policy and regional posture in profound ways.
Domestically, Takaichi inherits an economy still struggling to balance fiscal consolidation and growth. She has indicated she intends to revive the spirit of Abenomics, but with a nationalist twist. Her vision blends fiscal expansionism with protectionist undertones, favouring state-led industrial revival and strategic investment in defence and technology.
Takaichi’s approach is likely to strengthen subsidies for the semiconductor, energy and defence industries, aligning with Japan’s broader ambition to reduce reliance on China and reinforce its security autonomy. However, this could risk inflating Japan’s already significant public debt and alienating moderates within the LDP, who prefer to focus on fiscal discipline.
For Japan’s economic partners, the implications are mixed. On one hand, Southeast Asian economies could benefit from Tokyo’s renewed drive for supply chain diversification. Under Takaichi, Japan could deepen its “friendshoring” strategy, redirecting investment and manufacturing capacity towards the likes of Vietnam, Indonesia and Thailand.


However, the tone of economic engagement is likely to change. While Kishida’s diplomacy was couched in the language of partnership and mutual development, Takaichi’s rhetoric focuses on strategic self-interest. Her emphasis on national security will blur the lines between economic aid and geopolitical alignment. Southeast Asian countries that lean closer to China or maintain neutrality could find Tokyo’s new policies more demanding, with aid and investment increasingly tied to strategic cooperation.
In the broader geoeconomic arena, Takaichi’s leadership could strengthen Japan’s coordination with the US but with a sharper ideological edge. She has been one of Washington’s most reliable allies in the LDP, supporting the US-Japan alliance as the linchpin of regional security.
Yet her approach is not purely deferential – it reflects a vision of Japan as an equal partner that must assert its own deterrence capability. Expect her government to accelerate defence spending beyond the current 2 per cent of GDP target, expand joint defence production with US industries and push for greater interoperability in missile defence and intelligence sharing.
At the same time, Takaichi’s assertiveness could complicate the US-Japan dynamic. Washington welcomes a strong Japan, but it could grow uneasy if Tokyo adopts a more confrontational tone towards Beijing or begins to reinterpret constitutional limits on collective defence too aggressively.


Relations with China, meanwhile, are likely to deteriorate further. Takaichi’s record leaves little room for ambiguity: she has repeatedly visited the Yasukuni Shrine, questioned wartime historical narratives and criticised Beijing’s coercive diplomacy in the East and South China seas.
Her administration is likely to harden Japan’s position on Taiwan, strengthen security coordination with the Philippines and support freedom of navigation operations in disputed waters. While such moves will reassure partners such as Vietnam and Indonesia, they could also increase the risk of confrontation with China, particularly if Tokyo emboldens US military activity in the region.
This evolving strategic orientation will ripple across Asia’s geopolitical landscape. The Indo-Pacific, already fragmented by great power competition, could become even more polarised.




In Southeast Asia, this will intensify the strategic dilemma for middle powers. Countries such as Indonesia and Malaysia, which value strategic non-alignment, could seek to hedge by strengthening regional centrality. Others, like Vietnam and the Philippines, could move closer to Tokyo, viewing Japan’s rearmament as a counterweight to Chinese assertiveness. As a result, Asia could enter a period of structured tension, a balance of interdependent rivalry – not power – where economic and security networks overlap yet compete.
In this landscape, Japan’s soft power and its credibility as a stable, technologically advanced democracy remain a critical asset. Takaichi’s challenge will be to prevent her ideological zeal from eroding this asset. If she manages to blend conservative nationalism with pragmatic economic and diplomatic strategy, she could redefine Japan as the decisive leader of Asia’s democratic front. If not, Japan risks drifting into isolation.
Ultimately, Takaichi’s rise represents a redefinition of Japan’s national purpose. Her premiership will test whether Japan can assert itself as a major power without reviving the ghosts of its past, and whether Asia can adapt to a Japan that no longer whispers but speaks with conviction and force.


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The arch-conservative’s victory in the LDP leadership race opens new possibilities for the domestic economy and foreign policy


The arch-conservative’s victory in the LDP leadership race opens new possibilities for the domestic economy and foreign policy.


China-Japan relations

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Sanae Takaichi

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


How Sanae Takaichi’s rise could reshape Japan and Asia’s future

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The arch-conservative’s victory in the LDP leadership race opens new possibilities for the domestic economy and foreign policy

The arch-conservative’s victory in the LDP leadership race opens new possibilities for the domestic economy and foreign policy