Japan: Takaichi propels LDP to supermajority, but will it last?

The Liberal Democratic Party (LDP), which has dominated postwar Japanese politics, won the largest majority in Japanese history at the recent Lower House elections. In reality, this was not a vote for the LDP but for Prime Minister Sanae Takaichi, who skillfully tapped into an anti-establishment mood that found no expression in Japan’s moribund opposition.

That moribund opposition is epitomised in the Centrist Reform Alliance (CRA), a coalition cobbled together on the eve of the election, with a confused, contradictory programme, that lost over 120 seats.

This all helped to pull the LDP out of an historic crisis. Last year, it lost its majorities in the Upper and Lower Houses of the Diet (parliament) and its 26-year coalition partner, Komeitō, jumped ship. However, it emerged from the 8 February elections with a supermajority, having won over two thirds of the seats.

Exit Ishiba, enter Takaichi

The LDP’s total reversal of fortunes started when Takaichi took over as Prime Minister from Shigeru Ishiba in the autumn.

Like her predecessors, Takaichi is a staunch nationalist and a faithful servant of capitalist interests. Indeed, she has named infamous British Conservative Prime Minister Margaret Thatcher as her political idol. But despite ultimately backing the exact same system as the rest of the ruling class (being a protegee of the late LDP Prime Minister Shinzo Abe), she is perceived as a relatively fresh face.

She does not come from one of the dynastic political families that have dominated the LDP and Japan for decades. The Satō–Kishi–Abe family line alone has produced three prime ministers, who have ruled the country for a combined 20 years in the postwar period. Takaichi, on the other hand, is the daughter of an office worker and a police officer.

Furthermore, she is regarded as a charismatic straight talker, with videos of her speeches going massively viral on social media in recent months. These factors meant that, even before announcing her policies, Takaichi had the allure of an ‘outsider’ from the traditional Japanese establishment, which appears increasingly senile and incompetent in the eyes of the masses, particularly the youth.

This sense that she’s an ‘outsider’, along with her promises to lower taxes and increase the pay in workers’ pockets, has boosted her approval ratings enormously among the youth, who are looking for a point of reference. Immediately after becoming prime minister, her approval rating amongst 18 to 39-year-olds stood at 77 percent according to an NHK poll – more than double her predecessor Ishiba’s paltry 38 percent.

But the LDP as a party has not received the same boost in optimistic support, continuing to poll at around 30 percent. In other words, millions of Japanese people remain opposed to the LDP, and gave Takaichi their support in spite of her party affiliation. This is a peculiar expression of the anti-establishment mood we have observed throughout the world.

The crisis of Japanese capitalism

But Takaichi’s personal qualities are not sufficient to explain this result, which is fundamentally a product of the crisis of Japanese capitalism that can be traced back to the collapse of the economy in the 1990s. The Japanese stock market (Nikkei 225) experienced a prolonged decline of almost 80 percent from 1989 to mid-2009, only surpassing the 1989 figure in 2024. However, this recovery on the stock market has not been matched with real economic development.

Takaichi’s personal qualities are not sufficient to explain this result / Image: Cabinet Secretariat, Wikimedia Commons

From 1989 to 2019, the country experienced an average GDP growth of only 1.2 percent annually, which has meant that Japan’s share of world GDP has dramatically shrunk, from 17.8 percent in 1995 to 3.6 percent in 2025. Similarly, Japan’s share of global exports peaked at 8.8 percent in 1986 compared to just 2.9 percent by 2023. In other words, Japan is a second-rate power, whose stagnant economy is saddled with debt, like many other old imperialist countries.

Meanwhile, real wages only rose 3 percent from 1991 to 2020 compared to 50 percent in the United States across the same period. The stagnation of the Japanese economy is linked to a crisis in productivity. Labour productivity used to grow by 9 percent each year in the 1960s, but since the 1990s it barely reaches annual growth of 1 percent. The country is now less productive than most of the OECD, falling behind countries like Lithuania, Czechia and Slovenia.

Rather than investing in developing the means of production, the capitalists have resorted to squeezing more and more surplus value from the working class by attacking the gains of the postwar period. Work hours are notoriously grueling, living space for ordinary Japanese people has continually shrunk, and social relations have been wrecked by stress and exploitation.

Burnout and mental health crises are rampant, to the point that terms like karoshi (death by overwork) and hikikomori (social withdrawal) have entered common parlance. Moreover, instead of guaranteed lifetime employment, which used to be the norm, part-time and casualised work is increasingly common for young people.

This is all compounded by an ageing population. In order to support the expanding proportion of elderly people, more wealth has to be extracted from the working-age population. But there simply is not enough economic growth to do so while maintaining the living standards of the past. The ‘lost generation’ of workers that entered the workforce following the economic collapse have tiny pensions due to their low wages and temporary work.

All that the youth have to look forward to is a life where they are worked to the bone to sustain the previous generation before being thrown on the scrap heap. The harder the young generation is squeezed, the more remote prospects of that generation being able to raise a family become, the more the demographic situation deteriorates further.

This is why the Japanese capitalists are trying to import cheap labour from abroad to tackle the labour shortages. Despite Takaichi’s anti-immigration rhetoric, restricting immigration would be totally self-defeating from the perspective of Japanese capitalism.

In line with the rest of the capitalist world, the Bank of Japan raised interest rates in 2024 for the first time in 17 years. With inflation ripping through the economy, exacerbating the general crisis of Japanese capitalism, the masses – and especially the youth – are looking for any kind of way out. In the absence of any serious, class-based alternative from the left, millions of Japanese are vesting their hopes in Takaichi because she has made pledges about improving the country’s economic fortunes rather than continuing its inexorable decline.

Takaichi’s policies

Immediately after taking office, Takaichi made a speech declaring that getting inflation under control would be the “government’s top priority”, and she would remove a surplus tax on gasoline and increase gas subsidies. She also pledged to suspend the consumption tax (an eight or ten percent Value Added Tax) on food and beverages for two years. With inflation rising under the LDP, the opposition parties adopted this demand as a major policy plank, only for Takaichi to steal it out from under them.

She has also stated that she will “throw away [her] own work-life balance” and would “work, work, work”, in a show of ‘solidarity’ with Japanese workers. Notably, Takaichi hasn’t promised to end super-exploitation at work, but her demagogic promise to ‘share the load’ nevertheless has a certain appeal.

With Trump seemingly disinclined to aid Taiwan in the event of a Chinese invasion, Japanese capitalism is under pressure to urgently rebuild its military / Image: Government of Japan, Wikimedia Commons

Alongside her measures to tackle inflation, Takaichi wants to hike military spending up to two percent of GDP by March and potentially even further to meet the Trump administration’s demands of 3.5 percent. This pledge, combined with Takaichi’s sabre-rattling over Taiwan (promising that Japan will come to its aid militarily in the event of a Chinese invasion) is both a signal of fealty to US imperialism, and an appeal to her nationalist base.

Takaichi’s own nationalist sentiments are well known, having been a regular visitor to Yasukuni shrine before becoming premier, where many Japanese criminals and murderers from the Second World War are buried and honoured. She is keen to project the image of a strong leader who will stand up to China and defend Japan from the instability on the world stage. This was in stark contrast to ex-Prime Minister Ishiba, who was seen as weak and incompetent.

But additionally, Takaichi represents a wing of the ruling class that wishes to transform Japan into the regional sheriff of the Pacific to combat Chinese influence, without the help of the United States. With Trump seemingly disinclined to aid Taiwan in the event of a Chinese invasion, focusing his attention on domination of the western hemisphere, Japanese capitalism is under pressure to urgently rebuild its military to fill the void, while maintaining good relations with Washington. These are further symptoms of the shifting balance of forces in the ‘multipolar world’.

‘Sanaeconomics’ vs. Bank of Japan

The question, now that she has her enormous majority, is whether Takaichi will be able to carry out her programme. In order to cut taxes and divert spending towards defence, the government must replace the lost funds from elsewhere.

The gasoline cuts will result in 1.5 trillion yen of lost revenue, while the consumption tax cut means 5 trillion yen less. That is a total of $41 billion which needs to be accounted for in the government budget, which is the largest to date at 122 trillion yen ($785 billion) – thanks in no small part to a record military budget of 9 trillion yen ($58 billion). Takaichi has claimed that this spending will be paid for by reducing subsidies for companies and raising taxes for higher earners, but her proposals do not cover all the lost revenue.

This implies that the state will rely on more borrowing, which is making the capitalist class uneasy. Japan already has a massive national debt, equal to 237 percent of GDP, a ratio second only to that of war-torn Sudan. The cost of servicing the debt is projected to rise to over 30 trillion yen due to increasing interest rates, and this will only get worse over time. As such, the markets (i.e. bankers and capitalists) are applying pressure on Takaichi not to get carried away, with the yen depreciating even further and bond yields shooting up in January.

Former Bank of Japan (BOJ) board member Takahide Kiuchi made it very clear that intervention to stop the yen’s freefall is ruled out:

“If bonds are being sold on speculative trading, the BOJ could see scope to intervene. But it’s clear the recent rise in yields reflects market concern over Japan’s fiscal policy. It’s the government’s job, not the BOJ’s, to deal with the consequences of market distrust over fiscal policy.”

There have been some comparisons made in the international press with Liz Truss, whose stint as Prime Minister of Great Britain was cut short after she tried to pass a budget of massive tax cuts for the rich in the middle of an inflationary crisis. The markets responded by threatening to wreck the British economy, leading the Conservative Party establishment to step in and have Truss removed.

However, unlike Truss, who was never elected, and had no mass base standing behind her, Takaichi has a big mandate. There would probably be a massive backlash if a similar manoeuvre was attempted before Takaichi is allowed to discredit herself. This partly explains why the yen has strengthened since the election, with the strategists of capital biding their time rather than immediately trying to force Takaichi to abandon her populist programme.

Constitutional revision

The massive military budget required to strengthen Japanese imperialism is predicated on removing Article 9 of the constitution (the ‘anti-war clause’). Since WWII, Japan has had an official pacifist foreign policy, and is only able to maintain its so-called ‘Self Defence Forces’ and defence industry due to a dubious interpretation of the constitution.

This means that any serious remilitarisation could provoke a constitutional crisis. Beyond the practical considerations, achieving constitutional revision would greatly strengthen the nationalists in the LDP by taking support from the right-populist Sanseitō party, alongside massively boosting Takaichi’s prestige amongst the nationalists.

The constitution has never been amended because it requires a two-thirds majority in both the Upper and Lower Houses before winning a simple majority in a popular referendum. In the postwar period, anti-militarism had a strong hold on the masses due to the horror and humiliation of the Second World War, which limited the ruling class’ room for manoeuvre.

But these sentiments are shifting in response to an increasingly chaotic world situation, the rise of China and the relative decline of US imperialism: the traditional guarantor of Japan’s national security. Polling conducted by Kyodo News indicated 48.8 percent support for Japan’s exercise of its right to collective self-defense in the event of an invasion of Taiwan, with 44.2 percent opposed.

Moreover, many young Japanese people have rejected the moral pacifism that defines the left-wing parties like Reiwa Shinsengumi and the Communist Party, whose anti-militarism was never combined with any serious proposals for improving the lives of Japanese people. These parties fell from a combined 17 seats to just five in this election.

The ambivalence of a growing section of Japanese society towards militarism opens up a serious possibility that Takaichi could succeed in revising the constitution / Image: 内閣官房内閣広報室, Wikimedia Commons

The ambivalence of a growing section of Japanese society towards militarism opens up a serious possibility that Takaichi could succeed in revising the constitution, which would be a titanic development in the direction of militarisation in the Pacific.

Where now for the LDP?

Since its inception, the LDP has on many occasions taken and passed policies from opposition parties – albeit in a watered down form – as a means to undermine them and maintain its rule. However, it is one thing to pass reforms and buy social peace during an historic upswing of capitalism, as the LDP did in the 1960s with the National Pension Act and the rollout of universal healthcare coverage. It is quite another to attempt to do so after over thirty years of economic stagnation as part of the deepest world crisis of capitalism.

One advantage for Japanese capitalism is that around half of Japan’s $8.6 trillion debt is actually foreign debt, a quarter of that being US Treasuries, a significant portion of which was accumulated in the 1990s. If necessary, this foreign debt could be leveraged to pay off the state’s creditors. But this would just be a way of kicking the can down the road.

Perhaps the LDP can manage to eke out some concessions with the remaining breathing room that they have – we will have to see. But even if they succeed in doing so in the short term, the crisis of Japanese capitalism will remain. Sooner or later, it will be necessary to make large cuts to pay for the ever-growing debt repayments and military budget. This will lead to splits in the ruling class about how to balance the books, while avoiding a backlash from the masses. Not to mention the impact of an impending global recession.

The right wing are feeling a sense of euphoria at their triumph. But the Takaichi cabinet is a colossus with feet of clay. It has no real solutions, will exacerbate the tensions within the ruling class, and will inevitably disappoint, preparing for a mass shift to the opposite political pole.

The task of Japanese class fighters is to fight Takaichi’s nationalism with working-class internationalism, not pacifism; to provide a communist solution to the crisis on the basis of workers’ power, not reformism; and above all, to build a revolutionary organisation capable of leading the coming Japanese revolution to success.