On October 21, 2025, Sanae Takaichi became Japan’s first female Prime Minister, assuming office as the 104th Prime Minister. The Takaichi Cabinet, formed as a coalition government between the Liberal Democratic Party (LDP) and the Japan Innovation Party, has maintained an approval rating exceeding 70% two months after its inauguration, with its policies significantly impacting the Japanese economy.
Cabinet Approval Rating: Maintaining Second-Highest Level in History
The Takaichi Cabinet’s approval ratings have recorded remarkable numbers across various opinion polls.
Major Survey Results (October-December 2025)
∙ Nikkei/TV Tokyo Survey: 74% at inauguration, 75% in November, 75% in December, maintaining high levels
∙ Asahi Shimbun Survey: 68% at inauguration, 69% in November, maintaining historically high levels
∙ Election.com × JX Press Survey: Record high of 70.1% in December
This approval rating ranks as the second-highest since the current survey methodology was introduced in 2002, following the Yukio Hatoyama Cabinet (75%). Compared to the Shigeru Ishiba Cabinet’s 51% at inauguration and final September rating of 37%, the effects of the regime change are pronounced.
Background of High Approval Ratings
The reasons for the Takaichi Cabinet’s high support include:
1. Expectations for Strong Leadership: The phrase “I will work and work and work and work and work” was selected for the New Words and Buzzwords Award, highlighting her communication power
2. Support from Younger Generations: Particularly strong support from the working-age population in their 20s-50s, with high popularity among youth
3. Policy Evaluation: Top reasons for support include “good policies” (36%) and “trustworthy character” (36%), with 44% rating inflation response favorably
4. Solid Support Base: 41% “strongly support” the cabinet, indicating a bedrock support base unlikely to waver
Major Policies of the Takaichi Cabinet
Prime Minister Takaichi has named her cabinet the “Cabinet of Decision and Progress,” adopting “Responsible Proactive Fiscal Policy” as its fundamental principle. The major policies outlined in her policy speech are as follows:
- Basic Economic and Fiscal Policy
The Takaichi Cabinet’s economic policy, also called “Sanaenomics,” consists of three pillars:
(1) Securing People’s Livelihoods and Responding to Inflation (approx. 11.7 trillion yen)
∙ Prompt abolition of provisional tax rates on gasoline and diesel fuel
∙ Support for winter electricity and gas bills (approx. 7,000 yen subsidy from January-March 2026)
∙ Distribution of rice coupons and electronic vouchers
∙ Increase in medical and nursing care fees
∙ Support for small and medium-sized enterprises and agriculture/forestry/fishery industries
∙ Consideration of refundable tax credits
(2) Realizing a “Strong Economy” through Crisis Management Investment and Growth Investment
∙ Priority Investment in Economic Security Fields
∙ Strengthening AI and semiconductor industry infrastructure
∙ 1 trillion yen public-private investment in shipbuilding industry
∙ Accelerating quantum technology innovation
∙ Fostering space industry (public-private rocket development support)
∙ Ocean development (autonomous underwater vehicles, domestic rare earth supply system)
∙ Advanced Science and Technology/Content Industries
∙ Support for drug discovery and medical technology development
∙ Expansion of startup support
∙ Support for overseas expansion of anime, games, manga, and other content
(3) Strengthening Defense Capabilities and Diplomatic Power
∙ Advance defense spending to 2% of GDP (allocating approximately 11 trillion yen in FY2025)
∙ Improvement of Self-Defense Force facilities (individual rooms in barracks, air conditioning)
∙ Early introduction of drone countermeasure equipment - Other Important Policies
Food Security
∙ Strengthening rice reserves
∙ Expansion of agricultural support measures
Energy Security
∙ Promoting utilization of nuclear power
∙ Energy policy transformation
National Resilience Measures
∙ Disaster recovery and disaster prevention infrastructure development
Health and Medical Security
∙ Strengthening medical systems
Constitutional Amendment
∙ Aiming for Diet proposal during tenure
Imperial Household Law Reform
∙ Promoting discussions on stable imperial succession
Labor Policy
∙ Considering relaxation of working hour regulations (64% support)
Political Reform
∙ Reduction of Diet member seats (coalition agreement with Japan Innovation Party)
∙ Promoting sub-capital concept (67% support) - Scale of Comprehensive Economic Measures
The comprehensive economic measures decided by the Cabinet on November 21, 2025:
∙ Total: 21.3 trillion yen (net basis)
∙ Supplementary Budget: 18.3 trillion yen (largest scale excluding COVID-19 period)
∙ National fiscal measures including fiscal loans: approximately 25.5 trillion yen
Impact on the Japanese Economy
The Takaichi Cabinet’s policies have already begun to impact the Japanese economy in various ways.
Positive Impacts
- Rising Growth Expectations
∙ Large-scale investment in strategic fields such as AI and semiconductors has raised expectations for economic growth
∙ The Japan Growth Strategy Headquarters has been launched, with 17 items designated as strategic fields
∙ Demand creation effects from proactive fiscal policy are anticipated - Strengthened Support for Working-Age Population
∙ Introduction of refundable tax credits enables support for middle-income households not covered by conventional support for non-taxable households
∙ The principle of “rewarding those who work hard” may enhance work motivation - Activation of Defense Industry
∙ Significant increase in defense spending is expected to strengthen the defense industrial base and create employment - Expansion of Business Opportunities
∙ Many business opportunities are emerging in priority investment fields (AI, semiconductors, shipbuilding, quantum, space, ocean, etc.)
Concerns
- Fiscal Deterioration Risk
∙ Large-scale fiscal spending raises concerns about fiscal sustainability
∙ However, Prime Minister Takaichi explains that “the combined post-supplementary national bond issuance of the initial and supplementary budgets is expected to be below last year’s 42.1 trillion yen”
∙ Policy aims to ensure fiscal sustainability by reducing government debt-to-GDP ratio - Yen Depreciation and Inflation Risk
∙ The stance of proactive fiscal policy and continued monetary easing may trigger yen depreciation, potentially fueling inflation through rising import prices
∙ Financial markets have seen yen depreciation and rising long-term interest rates due to concerns about expansionary fiscal policy
∙ However, measures such as electricity/gas subsidies and rice coupon distribution are planned as inflation countermeasures - Possible Inflation Acceleration
∙ Large-scale fiscal spending may boost demand and further accelerate inflation under supply constraints
∙ Economic commentators point out that “inflation countermeasures may backfire” - Impact on Bank of Japan Monetary Policy
∙ Prime Minister Takaichi has asked the BOJ to be cautious about rate hikes, stating “sustainable, stable price increases are still halfway there”
∙ However, she has also maintained the government’s official position, suggesting that her initial stance on monetary policy intervention is being revised
Impact on Actual Economic Indicators
Stock Market
∙ Stock prices have risen, particularly for companies in growth sectors, due to expectations of proactive fiscal policy
∙ A Monex Securities strategist predicts “a path to Nikkei average reaching 50,000”
Foreign Exchange Market
∙ Yen has weakened due to fiscal expansion concerns and expectations of continued monetary easing
∙ However, the government emphasizes coordination with the BOJ to avoid extreme yen depreciation
Long-term Interest Rates
∙ Long-term interest rates are trending upward due to fiscal deterioration concerns
∙ Some have pointed to concerns about a “Japanese version of Truss shock”
Challenges in Government Management
While the Takaichi Cabinet enjoys high approval ratings, it also faces the following challenges:
- Constraints of Minority Government
∙ The combined seats of the LDP and Japan Innovation Party fall short of a majority in both houses
∙ Passage of budgets and laws is difficult without opposition cooperation
∙ Prime Minister Takaichi shows flexibility, stating she will “accept opposition proposals as long as they don’t contradict basic policies” - Stagnant Party Support
∙ While cabinet approval exceeds 70%, LDP party support remains around 36%
∙ Overall party support has plateaued, unable to exceed levels seen in the early Ishiba Cabinet - Relations with Coalition Partners
∙ Komeito has left the coalition (78% say “it was good”)
∙ Japan Innovation Party remains in external cooperation only (50% say “external cooperation is fine”)
∙ Implementation of coalition agreement items such as Diet member reduction affects government stability - Opposition Criticism
∙ The Constitutional Democratic Party and others have raised sharp questions about yen depreciation/inflation risks, fiscal deterioration, and whether to continue Abenomics
Conclusion: Future Prospects for the Takaichi Cabinet
Two months after its inauguration, the Takaichi Cabinet maintains historically high approval ratings while launching large-scale economic measures. The stance of trying to balance inflation countermeasures and growth investment under “Responsible Proactive Fiscal Policy” has received a certain level of evaluation.
Support is particularly strong among younger generations and the working-age population, with high expectations for “strong leadership.” Bold investments in strategic fields such as AI and semiconductors have the potential to lead to structural transformation of the Japanese economy and strengthened international competitiveness.
On the other hand, challenges are numerous, including fiscal deterioration risks from large-scale fiscal spending, concerns about accelerating yen depreciation and inflation, and instability in government management due to minority status.
Future focus will be on early passage of the FY2025 supplementary budget, effectiveness of economic measures, and how to balance fiscal and monetary policy. Whether Prime Minister Takaichi’s vision of “making the Japanese archipelago strong and prosperous” can be realized depends on future policy management.
With the possibility of a long-term administration being suggested, attention continues to focus on how the Takaichi Cabinet’s economic policies will impact the Japanese economy.
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