By Tim Kelly and Rocky Swift
TOKYO (Reuters) – Hardline conservative Sanae Takaichi is almost certain to become Japan’s first female prime minister on Tuesday, after the right-wing opposition Japan Innovation Party, known as Ishin, agreed to back her premiership.
The partnership, with a combined 231 seats in parliament’s dominant lower house, falls two short of a majority, but the tally is almost certainly enough for Takaichi to win Tuesday’s parliament vote for the next prime minister.
“I very much look forward to working together … in an endeavour to strengthen Japan’s economy and transform the country,” Takaichi said.
Her remarks came at the signing of a formal coalition pact with Ishin leaders, Osaka governor Hirofumi Yoshimura and parliamentary head Fumitake Fujita. The deal included deadlines and the adoption of specific policies, Fujita had said earlier.
Investors’ anticipation of a pact that could boost government spending weakened the yen and pushed stocks to a record high, with the benchmark Nikkei share index closing up 3.4%.
In any runoff in the parliament vote, Takaichi needs only a majority of ballots cast, rather than those of all lawmakers.
But to govern effectively, she will need to court other opposition groups to back items such as an upcoming supplementary budget.
In return for its support, Ishin, until now Japan’s second largest opposition party, got pledges from Takaichi to advance its small-government agenda, from a cut of 10% in the number of lawmakers to suspending a consumption tax on food for two years.
The deal came 10 days after the collapse of the LDP’s 26-year coalition with Komeito, which ended its alliance after the ruling party’s choice of Takaichi as its new leader.
Komeito’s abrupt withdrawal triggered talks among opposition parties, including Ishin, that could have derailed Takaichi’s premiership ambitions and ejected her party from power for the first time in more than a decade.
But Ishin’s decision to side with the LDP ends the threat.
FISCAL DOVE, SECURITY HAWK
A fiscal dove, Takaichi has called for higher spending and tax cuts to cushion consumers from rising inflation and has criticised the Bank of Japan’s decision to raise interest rates.
“Expectations for Takaichi’s economic policies, which include fiscal expansion and monetary easing, appear to be facilitating rising share prices and a weaker yen,” said Nomura Securities strategist Fumika Shimizu.
Some analysts say Ishin, which has advocated for budget cuts, could restrain some of Takaichi’s spending ambitions.
Takaichi wants to revise Japan’s pacifist postwar constitution to recognise the role of its military.
A regular visitor to the Yasukuni war shrine in Tokyo, viewed by some Asian neighbours as a symbol of wartime aggression, she wants higher defence expenditure to deter neighbouring China.
She has also called for stricter immigration rules and opposes social policies, such as allowing women to retain their surnames after marriage, which she says undermine traditional values.
For now, Ishin will not take up a post in Takaichi’s government when she announces her cabinet after Tuesday’s vote, at least until it is clear that its partnership with the LDP is working, Yoshimura said in a television interview on Monday.
“Right now, we’re still a group of lawmakers with no experience in government,” he said.
“So, rather than asking for a ministerial post, we want to first focus on realising our policies as part of the ruling coalition.”
(Reporting by Tim Kelly, Rocky Swift, Makiko Yamazaki, Mariko Katsumura, Satoshi Sugiyama, Makiko Yamazaki and Anton Bridges; Editing by Clarence Fernandez)
