On October 24, 2025, Japan’s first female prime minister, Sanae Takaichi, delivered her inaugural policy speech before the National Diet. Defining herself as someone who “never stops believing in the strength of Japan and its people,” she declared her slogan, “Japan’s Rebirth.” The speech laid out a comprehensive vision spanning the economy, national security, and social policy. Yet behind her strong rhetoric lie the deep challenges of governing with a fragile coalition—formed between the Liberal Democratic Party (LDP) and Nippon Ishin no Kai—and questions about whether her ambitious promises can be fulfilled. This article analyzes Takaichi’s historic address from multiple perspectives, exploring her vision for Japan’s future and the obstacles awaiting her administration.

The Call for a “Strong Economy”: Japan’s New Vision of Proactive Fiscal Policy

Prime Minister Takaichi’s speech began with a powerful declaration: “We will turn people’s anxieties about the present and the future into hope, and build a strong economy.” She positioned the creation of this “strong economy” as the foundation for all national policy—including diplomacy and defense—and presented “responsible proactive fiscal policy” as the guiding principle of her economic management.

This signaled a shift from the notion of “an economy constrained by fiscal limits” to “a fiscal policy driven by economic strength.” Her plan envisions a virtuous economic cycle in which strategic public spending increases household income, boosts consumer confidence, raises corporate profits, and ultimately expands tax revenues—without raising tax rates. At the same time, she emphasized fiscal discipline, pledging to keep debt growth within the pace of economic expansion and to reduce the debt-to-GDP ratio to maintain market confidence.

The rhetoric of a “strong economy” and a “Japan that blooms at the center of the world” deliberately echoed phrases used by former Prime Minister Shinzo Abe, whose long administration inspired Takaichi politically. The message was clear: her government is the legitimate successor to Abenomics. By reaffirming this legacy, Takaichi is consolidating support among the conservative base of the LDP—a calculated move to reinforce her power.

The market responded favorably. The Nikkei 225 Stock Average surpassed ¥50,000 for the first time in history, reflecting investor optimism about her fiscal expansion. The moment marked a clear signal both domestically and internationally: Japan is embarking once again on a bold economic experiment—prioritizing growth over austerity.

From Inflation Relief to “Crisis Management Investment”: Two Pillars of Policy

The Takaichi administration’s economic program rests on two timeframes: short-term stabilization of household life and long-term national growth. The prime minister named inflation countermeasures as her cabinet’s “top priority.”

Key measures include:

Abolishing the provisional gasoline tax rate during the current Diet session;

Providing wintertime subsidies for electricity and gas bills;

Expanding support for small businesses and agriculture, forestry, and fisheries sectors.

She announced plans to compile an economic package promptly and submit a supplementary budget to the Diet. However, Takaichi also made clear that the once-promised cash handouts to all citizens would not proceed, citing insufficient public support. Instead, she shifted to more targeted assistance.

Her speech also introduced a new strategic concept: “Crisis Management Investment.” Defined as proactive, public–private investments to preempt national risks in economic security, food, energy, health, and national resilience, this initiative seeks to strengthen Japan’s foundational capabilities. Under this framework, Japan will make bold investments in cutting-edge technologies—AI, semiconductors, quantum computing, biotechnology, and space—aiming to become “the easiest country in the world to develop and utilize AI.”

To lead this effort, Takaichi announced the creation of the Japan Growth Strategy Council. The idea of “Crisis Management Investment” reflects her background as former Minister for Economic Security and marks a shift from industrial policy toward state-led strategic intervention against vulnerabilities in supply chains and geopolitical risk. It aligns Japan with the global trend of techno-nationalism, exemplified by the U.S. CHIPS Act.

However, the speech notably did not specify funding sources for these expansive plans. Despite invoking “responsible fiscal policy,” she offered little clarity on how to balance large-scale spending with inflation risks or long-term debt sustainability—leaving a fundamental contradiction unresolved.

A Turning Point in Security Policy: Accelerated Defense Spending and a Firm U.S. Alliance

Among the speech’s key highlights, the boldest came in the realm of national security. Takaichi described the military activities of China, North Korea, and Russia as “grave concerns,” affirming that Japan’s security environment is becoming increasingly severe.

She vowed to “fundamentally strengthen Japan’s defense capability on our own initiative,” accelerating the goal of raising defense spending to 2% of GDP by 2027—by moving the timeline two years earlier, and taking measures “within this fiscal year” through a supplementary budget. This marks a historic turning point in Japan’s postwar defense policy.

The timing also reflected careful diplomatic strategy: her speech came just days before U.S. President Donald Trump’s visit to Japan. By announcing this increase proactively, Takaichi avoided the appearance of yielding to U.S. pressure while simultaneously demonstrating Japan’s commitment to the U.S.–Japan alliance. Declaring the alliance as the “axis” of her foreign policy, she pledged to build a relationship of trust with Trump and “elevate bilateral ties to new heights.”

This assertive policy shift became possible largely because of Japan’s new political alignment. The Komeito, long the LDP’s pacifist coalition partner and brake on defense expansion, left the coalition. It was replaced by Nippon Ishin no Kai, which strongly supports constitutional revision and national defense. The shift from “brake” to “accelerator” created an environment in which conservative policies—once difficult even under Abe—could now advance rapidly. The birth of the Takaichi government thus signals the beginning of an era in which Japan’s security policy moves decisively toward greater autonomy and assertiveness.

A Fragile Coalition: Balancing Expectations and Doubts

Takaichi’s forceful “Rebirth of Japan” vision currently enjoys broad public support. Early polls show a cabinet approval rating of around 70%, buoyed by enthusiasm for change—a typical “honeymoon bump” for new administrations. But beneath this optimism lies fragility.

The coalition between the LDP and Nippon Ishin no Kai—formed under the banner of national revival—lacks a parliamentary majority in both houses. This structural weakness is the administration’s most serious Achilles’ heel.

Acknowledging this, Takaichi repeatedly emphasized in her speech: “As long as proposals do not contradict the government’s basic policies, we will accept suggestions from any party and engage in sincere and flexible discussions.” This was not mere formality but a plea for survival—a recognition that passing even a single bill or budget will require opposition cooperation.

Yet the Diet session was anything but harmonious. Opposition lawmakers from the Constitutional Democratic Party heckled the prime minister, shouting “Resolve the slush fund scandal!”—forcing her to pause her speech momentarily. Even the former coalition partner Komeito quickly criticized her address, suggesting a turbulent road ahead for parliamentary management.

Here lies the Takaichi administration’s fundamental dilemma: her rhetoric of determination—“I will never give up”—stands in sharp contrast to a political reality in which her policy success depends heavily on the goodwill of rival parties.

If she can transform her high approval ratings into legislative momentum, Takaichi may yet break through these constraints. If not, public expectation will swiftly turn into disappointment. Her leadership will be tested not by ideals, but by results—and that test has only just begun.