Sanae Takaichi elected as new LDP leader, likely to become first female PM

Japan’s governing party on Saturday (October 4, 2025) elected former Economic Security Minister Sanae Takaichi as its new leader, making her likely to become the country’s first female Prime Minister.

In a country that ranks poorly internationally for gender equality, Ms. Takaichi would make history as the first female leader of Japan’s long-governing conservative Liberal Democratic Party. She is one of the most conservative members of the male-dominated party.

Ms. Takaichi beat Agriculture Minister Shinjiro Koizumi, the son of popular former Prime Minister Junichiro Koizumi, in a runoff in an intraparty vote by the LDP on Saturday.

Ms. Takaichi replaces Prime Minister Shigeru Ishiba as the party hopes to regain public support and stay in power after major election losses.

She is likely to be Japan’s next Prime Minister because the party remains by far the largest in the lower house, which determines the national leader, and because opposition groups are highly splintered.

Takaichi hails ‘new era’ after winning leadership of Japan’s ruling LDP

Sanae Takaichi hailed a “new era” for Japan’s ruling party after becoming its first female president on Saturday (October 4, 2025).

“Together with so many of you, we have carved a new era for the LDP,” Ms. Takaichi said at the headquarters of the Liberal Democratic Party in Tokyo.

Her victory puts her on course to become Japan’s first woman Prime Minister.

The LDP, whose consecutive losses in parliamentary elections in the past year have left it in the minority in both houses, wants to select a leader who can quickly address challenges in and outside Japan, while seeking cooperation from key opposition groups to implement its policies.

The former Economic Security Minister, a conservative nationalist with an expansionary agenda, is expected to replace Prime Minister Shigeru Ishiba since the LDP is the largest in parliament.

Below are comments on the outcome:

Naoya Hasegawa, Chief Bond strategist, Okasan Securities, Tokyo

“The chance of the Bank of Japan’s interest rate hike later this month has weakened. The market will initially react to the outcome of the LDP election by buying bonds with mid-term maturities and selling super-long dated bonds. So the curve will steepen.

“The market saw a more than 60% chance for the BOJ’s rate hike to 0.75% until now, but that will fall to below 50% next week.

“The market’s expectations for the BOJ’s interest rate hike had risen lately as the market priced in Koizumi’s win, and a hawkish message from BOJ board member (Asahi) Noguchi.”

Toshinobu Chiba, Fund Manager, Simplex Asset Management, Tokyo

“This is really surprising. I think we’ll see the yen depreciate and a twist steepening of the JGB yield curve. And we have to see what her policy details are.”

Yuka Hayashi, vice president, The Asia Group, Washington DC

“Takaichi is a very experienced politician. She has had some experience working in the U.S. as well, a long-term observer of U.S.-Japan relations, so that’s her strength.

“She said that she’s confident that she could build a very strong personal relationship with President Trump. And the reason for that is her policy focuses on what she calls the ‘Japan First’ policy. And that kind of corresponds to President Trump’s America First policy. She sees that sort of common thread there. On the other hand, she’s a hardliner, very conservative when it comes to Japan’s relationship with its Asian neighbours.

“She has had a very hawkish stance on World War II legacy issues. She has insisted on visiting the Yasukuni Shrine numerous times, knowing that would inflame Japan’s relationship with its neighbours. So there is some concern that she could fuel tensions with the relationship with South Korea and China.

“This is a very challenging time for the LDP so I think she would probably try to focus on party unity and be very careful about taking excessively conservative hard-line stances in foreign policy.”