Fractured Japanese politics could ensnarl Takaichi's economic plans

After a wild week, Ms Sanae Takaichi may have found the political support she needs to become Japan’s next prime minister - but the new cross-party alliances come with risks that her economic plans will get mired in an increasingly fragmented legislature.

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Japan’s Lower House of Parliament is set to select a prime minister to replace Mr Shigeru Ishiba on Oct 21, and Ms Takaichi is likely to win amid a lack of any strong alternative bids.

Ms Takaichi won the race to become leader of the ruling Liberal Democratic Party (LDP) earlier in October, ordinarily guaranteeing her the premiership in Japan, but she faced a major setback when the party's junior coalition partner withdrew its support for her.

That has forced her to seek support from other parties, namely the right-leaning Japan Innovation Party, known as Ishin, which advocates drastic social security reform.

On the one hand, such an alliance could give Ms Takaichi the green light to loosen the fiscal spigot through big spending and even tax cuts, given her focus on revitalising growth over restoring fiscal discipline.

But a much less cohesive political consensus and the LDP’s weakened minority government risk stalling legislation to address Japan’s chronic labour shortages, rapidly ageing population and acute supply constraints.