Hardliner Takaichi elected as Japanese premier, shattering glass ceiling

An acolyte of former Prime Minister Shinzo Abe and an admirer of Britain's Margaret Thatcher, Takaichi is expected to return to Abe-style government stimulus as she attempts to jumpstart an economy saddled with slow growth and rising prices. Her victory marks a pivotal moment for a country where men still hold overwhelming sway.

But she is also likely to usher in a sharp move to the right on issues such as immigration and defence, making her the latest leader in tune with the broader rightward shift in global politics. She received 237 votes in the election in parliament's 465-seat lower house on Tuesday and then won a similar vote in the less powerful upper house.

Takaichi's victory was secured after her Liberal Democratic Party, which has governed Japan for most of its postwar history, agreed on Monday to form a coalition with the right-wing Japan Innovation Party, known as Ishin.

Together the two parties are two seats short of a majority in the lower house, meaning she will have to court other opposition groups to govern effectively and win approval from an upcoming supplementary budget.

Takaichi's success will depend on her winning the cooperation of more opposition lawmakers, said Tadashi Mori, a professor of politics at Aichi Gakuin University

“The two parties do not command a majority in either chamber and to ensure a stable government and gain control of key parliamentary committees, they will need to secure more than half the seats,” he said.

PREVIOUS COALITION BROKE UP AFTER QUARTER CENTURY

She takes over when Japanese politics appears more fractured now than at almost any other time in recent memory, thanks in part to the rise of the smaller, hard-right Sanseito Party, which has siphoned voters away from the LDP.

The LDP's former coalition partner, the more moderate Komeito, broke up their 26-year-old alliance this month after the party chose right-wing Takaichi as its new leader.

"Since former Prime Minister Abe passed away, we’ve felt that both national politics and the LDP itself have drifted leftward. Ms. Takaichi, I believe, sits more in the center-right of the party, so we hope she’ll steer national politics back toward the middle,” the head of Sanseito, Sohei Kamiya, told broadcaster NHK.

"While we won’t hesitate to oppose her when necessary, we intend to maintain a friendly working relationship.”

Takaichi's endorsement of Abe-style fiscal stimulus has prompted a so-called "Takaichi trade" in the stock market, sending the Nikkei .N225 share average to record highs, the most recent on Tuesday. But it has also caused investor unease about the government's ability to pay for additional spending in a country where the debt load far outweighs annual output. Both the yen and bond prices have weakened as a result.

Any attempt to revive Abenomics could also run into trouble, Mori said, because the policy was devised to fight deflation, not higher prices.

“In today’s inflationary environment, further stimulus risks only weakening the yen," Mori said.

Japan is hamstrung by price increases as the weaker yen has pushed up the cost of imports of everything from food to fuel. Higher prices, together with chronically low wages, have sparked public anger and fuelled support for opposition groups including far-right upstarts.

ISHIN MAY PUT THE BRAKES ON SOME SPENDING

Some analysts say Ishin, which has advocated for budget cuts, could restrain some of Takaichi's spending ambitions.

During her campaign for LDP leadership, Takaichi said defence and national security would be core pillars of any administration she led. She pledged to raise Japan’s defence spending, deepen cooperation with the United States and other security partners.

A frequent visitor to the Yasukuni war shrine in Tokyo that some Asian neighbours view as a symbol of wartime aggression, she has also called for a revision of Japan’s postwar pacifist constitution to recognise the existence of the nation’s military forces.

Her new cabinet ministers are expected to be announced later in the day with another Abe disciple, Satsuki Katayama, expected to be named as the country's first female finance minister.

Takaichi will be sworn in as Japan's 104th prime minister on Tuesday evening to succeed the incumbent Shigeru Ishiba, who last month announced his resignation to take responsibility for election losses.