Japan's LDP Forms Coalition With Ishin Ahead Of Takaichi's Historic Premiership

Japan's ruling Liberal Democratic Party (LDP) has secured a coalition agreement with the Japan Innovation Party (JIP), paving the way for Sanae Takaichi to become the country's first female prime minister. This new alliance, formed after the LDP's longtime partner Komeito exited the coalition over policy and scandal concerns, gives the combined parties 231 seats in the lower house, just shy of an absolute majority but enough to likely ensure Takaichi's appointment in the upcoming vote. Markets responded positively, with the Nikkei 225 hitting record highs, reflecting investor confidence in political stability and continuity in pro-growth economic policies. The coalition deal includes shared stances on defense, energy, and diplomacy, with JIP receiving cabinet posts and influence over decisions such as establishing a second capital. Despite the coalition being two seats short of a majority, Takaichi is expected to win due to the voting system allowing her to prevail if she secures more support than her opponent in a runoff. Her leadership is seen as a conservative shift, with expectations she will favor fiscal stimulus and maintain a tough stance on China, aligning with recent LDP priorities.