TOKYO, Jan. 11 (Reuters) – The leader of her party’s coalition partner stated on Sunday that Japanese Prime Minister Sanae Takaichi might call an early general election, following reports in the media that she was thinking about holding a referendum in February.
The conservative Takaichi, the first female prime minister of Japan and a supporter of Margaret Thatcher in Britain, would be facing the electorate for the first time, providing her with an opportunity to build on the high public popularity ratings she has received since assuming office in October.
Although her tough attitude on China has won over right-wing supporters, it has caused a significant diplomatic rift with Japan’s strong Asian neighbor.
The chairman of the Japan Innovation Party, or Ishin, Hirofumi Yoshimura, told public broadcaster NHK that he spoke with Takaichi on Friday and thought that her perspective on election scheduling had changed to a “new stage.”
ELECTION WOULD COMPLICATE TAKAICHI’S SPENDING PLANS
“I wouldn’t be surprised if she made the decision as reported by the media,” Yoshimura stated. According to government sources cited by the Yomiuri newspaper on Friday, Takaichi was thinking of organizing a snap election on February 8 or 15.
According to Yoshimura, he and Takaichi did not talk about the precise date of any elections. In an interview with NHK that was recorded on Thursday and shown on Sunday, Takaichi remained silent about when she would call an election. Takaichi, who supports significant spending to strengthen the second-largest economy in Asia, said she recently gave her cabinet members instructions to make sure the supplemental budget for the fiscal year through March is executed on schedule and that the budget for the following fiscal year is approved by parliament.
“At present, I am focusing on the immediate challenge of ensuring that the public feels the benefits of our stimulus policies aimed at cushioning the blow of inflation,” she stated.
However, a February election “would make it impossible to pass the budget by the fiscal year-end, at a time Japan’s economy faces a critical phase,” according to Tetsuo Saito, head of the opposition Komeito. He told NHK that he was shocked to learn that Takaichi was thinking of dissolving parliament when it meets on January 23.
Takaichi’s flagship spending initiative is part of her $783 billion spending proposal, which is her maiden budget as prime minister. Following the Yomiuri story on her election plans, the yen weakened vs the dollar on Friday.
Higher U.S. tariffs have not hurt Japan’s economy, but persistent food inflation has reduced spending.
Takaichi’s government would have to create a stopgap budget if it couldn’t pass the budget by the end of March, which may cause spending plans to be delayed.
ECONOMIC RISK FROM CHINA DISPUTE
In a statement released on Saturday, Japan’s Internal Affairs Ministry urged regional election committees to begin preparations for an early election. Political analyst Shigenobu Tamura claimed the remark indicated the election was a “done deal,” despite the ministry’s claim that it was only reacting to media reporting.
Former prime minister and leader of the biggest opposition party in Japan, the Constitutional Democratic Party of Japan, Yoshihiko Noda, stated that although he had anticipated Takaichi passing the budget before holding elections, he now believed she would dismiss parliament on January 23.
Japan’s trade friction with China poses another economic danger, as Beijing’s restrictions on essential rare earths might hurt the country’s export-dependent economy.
In November, Takaichi sparked the conflict by claiming that a Chinese assault on Taiwan, which is ruled by democracy, may be considered an existential threat to Japan and could lead to a military retaliation from Tokyo. Taiwan’s government disputes China’s assertion that Taiwan is a part of its territory.
Since then, China has, among other things, prohibited the shipment of dual-use goods to Japan’s military, canceled meetings and events, and advised its citizens not to visit Japan.
Takaichi told NHK that Chinese export restrictions aimed only at Japan were undesirable and against international norms. While collaborating with its Group of Seven allies to create supply chains that lessen dependency on “a particular country,” Japan is engaging in diplomatic negotiations with China, she said.