Japan 2025: external shocks, domestic turbulence and the rise of Takaichi Sanae

This article analyses the political «turbulence» that defined Japan’s domestic andinternational landscape throughout 2025. Domestically, the period was characterizedby an unprecedented crisis for the Liberal Democratic Party (LDP), which, for thefirst time since 1955, lost its majority in both houses of the National Diet followinga decisive defeat in the Upper House election. The study examines how this setback,coupled with economic pressures such as rising inflation driven by increased rice pric-es, undermined the government’s legislative capacity and contributed to record-lowpopularity. Central to this investigation is the role of influential LDP veterans andhawkish factions in unseating Prime Minister Ishiba Shigeru to facilitate a shift to-ward a more conservative posture of the party and the cabinet under Takaichi Sanae.The election of Takaichi, Japan’s first female prime minister and an ideological heirto Abe Shinzō, marked a significant change in the party’s internal «organization»and strategic direction. Her commitment to an expansionary fiscal policy is analyzedin relation to the resulting friction with the Bank of Japan. Furthermore, the paperexplores the «normalization» of Japan’s security policy amidst regional tensions andthe return of Donald Trump to the U.S. presidency. By evaluating the shifting ration-ality behind these policies – moving from a focus on China’s rise to concerns over theU.S. commitment to regional defence – the article highlights how Japan continues tofollow in «Abe Shinzō’s footsteps».