Is Sanae Takaichi Japan’s Margaret Thatcher – or its next Liz Truss?

Under the slogan “#ChangeLDP”, Japan’s long-ruling Liberal Democratic Party (LDP) has elected Sanae Takaichi as its new leader. Pending a vote in the Diet’s lower house later this month, she is poised to become Japan’s next prime minister — and the first woman ever to hold the post.

At first glance, this appears historic. Takaichi is not only the LDP’s first female leader, but also one of the few postwar politicians to rise without inheriting a family seat. In a political culture dominated by male dynasties, her ascent seems to signal long-overdue change. In a country long criticised for gender inequality, it is a powerful image of progress.

In reality, however, Takaichi’s rise reflects a return to familiar politics. Her predecessor, Shigeru Ishiba, resigned after a year in office following electoral defeats. Those losses were not solely his doing. Ishiba had vowed to reform the LDP after scandals over ties to the Unification Church and slush funds, but he faced entrenched resistance.

As the party’s old factions re-emerged, senior figures rallied behind Takaichi’s leadership bid, reasserting the factional networks that have long defined Japanese conservatism. Takaichi has already signalled a return of the party’s old elite to the centre of power, while moving to end efforts to hold those involved in past scandals accountable.

Takaichi’s victory signals a party operating in crisis mode. In recent months, the LDP has lost voters to new populist right-wing parties such as Sanseito. To stop the bleeding, it has shifted toward a harder conservative line.

This pattern of “crisis and compensation” is not new. In the 1970s, threatened by the left, conservatives adopted welfare and environmental policies to retain power. Today, facing challenges from the populist right, the LDP has leaned on nationalism, anti-immigration rhetoric and historical revisionism.

A self-described social conservative, Takaichi opposes allowing married couples to retain separate surnames and rejects female succession to the imperial throne. She has expressed admiration for former British prime minister Margaret Thatcher, though whether her premiership will prove equally transformative remains to be seen.

A close ally of the late Shinzo Abe, Takaichi is widely viewed as the torchbearer of his political legacy. Economically, she pledges to continue the expansionary fiscal and monetary policies of “Abenomics”, prioritising growth over fiscal restraint.

With Japan’s debt-to-GDP ratio exceeding 260%, Takaichi has remained vague about how she would sustainably finance her plans to ease economic pressures on households.

Politically, she seeks to complete Abe’s project of “taking Japan back” from the constraints of the postwar regime, by revising the pacifist constitution and strengthening national defence.

In foreign policy, Takaichi supports Abe’s vision of a “Free and Open Indo-Pacific”. She advocates deeper cooperation with the United States and within the Quad, comprised of the US, Australia, Japan and India. She also supports stronger regional partnerships to bolster deterrence.

Her hawkish stance on China and North Korea aligns with this agenda. She has vowed to increase defence spending — a move likely welcomed by the Trump administration in the US, which has urged Tokyo to approach NATO’s 5% benchmark. Japan’s defence budget is currently about 1.8% of GDP.

Takaichi also inherits a pending trade deal with Washington involving a Japanese investment package worth US$550 billion (A$832 billion), though many details remain unresolved.

Meanwhile, her record of visiting the controversial Yasukuni Shrine — which honours Japan’s war dead, including convicted war criminals — risks undoing recent progress in relations with South Korea and inflaming tensions with China. Such moves could undercut Japan’s efforts to act as a stabilising force in regional security.

Domestically, Takaichi’s greatest challenge will be to unite a fragmented LDP while addressing an increasingly frustrated electorate. Voters facing stagnant wages and rising living costs may have little patience for ideological battles.

Her incoming cabinet will also face a divided Diet (Japan’s parliament), where the LDP lacks majorities in both chambers. Expanding the ruling coalition is one option, but the LDP’s long-time partner Komeito remains wary of constitutional revision and nationalist policies. Takaichi has already hinted at courting newer populist parties that share her support for an anti-espionage law and tighter immigration controls.

In many respects, Takaichi’s rise encapsulates the LDP’s enduring survival strategy — adaptation without reinvention. The party’s claim to renewal masks a deeper continuity: reliance on charismatic conservative figures to preserve authority amid voter fatigue and opposition weakness. Her leadership may consolidate the LDP’s right-wing base, but offers little sign of institutional reform or ideological diversity.

So whether her premiership brings transformation or merely reinforces old patterns remains uncertain. Her commitment to economic stimulus may buy time, but Japan’s deeper structural challenges — ageing demographics, inequality, and regional decline — demand creativity the LDP has long deferred. If Takaichi focuses instead on constitutional revision and identity politics, she risks alienating centrist voters and exhausting public patience for culture wars.

A visit from US President Donald Trump later this month and series of regional summits will provide her first diplomatic test. It will also offer a glimpse of how she balances assertive foreign policy with domestic credibility. Much will depend on her ability to convince a sceptical electorate that her leadership represents more than another chapter in the LDP’s politics of survival.

If she succeeds, Takaichi could redefine Japanese conservatism and secure a lasting legacy as her country’s first female prime minister. If she fails, the comparison to “Japan’s Margaret Thatcher” may quickly fade — replaced by that of Liz Truss, another short-lived leader undone by party division and unmet expectations.