If the Liberal Democratic Party’s leaders thought that dumping Shigeru Ishiba as party president and prime minister would lead to greater party unity and make the LDP more popular with the general public, they were sorely mistaken.

The Komeito has decided to leave its 26-year-long coalition with the LDP. Opposition parties, which together hold the majority of seats in the lower house, are wondering out loud if this is a time to put one of their leaders forward to challenge the LDP’s new president, Sanae Takaichi, when the Diet meets to select a new prime minister.

Whatever happens in the coming days, the  decline of the LDP — the party that has dominated Japanese politics for more than 60 years — is likely to accelerate.

The LDP appears at a loss as to what to do about it. All five candidates who ran to succeed Ishiba decided to avoid taking controversial positions that might cost them votes. They played it safe. They all agreed that the LDP faces an existential crisis, but did not offer any ideas about how to overcome it.

The LDP has been in a long period of decline. After peaking at 5.4 million in 1991, its rank-and-file membership has steadily declined to only 900,000 today. The internal structures that once defined the party’s character have also withered.  Factions, once a defining feature of the LDP, haven’t entirely disappeared but they are now much weaker. And leaders with the political cunning and instinct to keep the LDP in power — figures like Kakuei Tanaka, Yasuhiro Nakasone, Noboru Takeshita and Junichiro Koizumi — are nowhere to be found.

One reason for Takaichi’s victory was the LDP’s fear of growing support for the right-wing party,  Sanseito. No one knows how popular this upstart party will become but there is no doubt that a lot of LDP politicians believed the party needed to choose a leader with strong conservative credentials to help prevent a shift among their supporters to the Sanseito.

Rather than reaching beyond its shrinking support base, the LDP went into a defensive crouch, focusing its energies on boosting turnout among its traditional supporters. To do that, it needed to support a staunch conservative like Takaichi. Failure to offer a message that speaks to the broader electorate’s concerns won’t help the LDP win seats at the next lower house election.

Whether the LDP goes into that election with Takaichi as prime minister is now uncertain at best. She may have broken the glass ceiling, but she is no feminist champion. She opposes women retaining their maiden names after marriage — though she herself does not use her husband’s surname — and supports maintaining imperial succession strictly through the male line.

In terms of her economic policies and longevity as prime minister, Takaichi may prove to be more Liz Truss than Margaret Thatcher, her supposed role model. She proposes fiscal expansion at a time when the Ministry of Finance is trying to establish fiscal discipline. In her post-victory press conference, she effectively declared war on the Bank of Japan’s independence, by asserting that the government is responsible for both fiscal and monetary policy. She runs a high risk of creating enemies among Japan’s most important government organisations.

Managing government ministries and relations with the Bank of Japan are not Takaichi’s only difficulties. Given the LDP’s minority position in both houses, her ability to enact legislation will depend on securing opposition support. Takaichi claims to want to continue Shinzo Abe’s agenda, from “Abenomics” to constitutional revision. But even with majorities in both houses for most of his tenure, Abe still failed to deliver his full agenda.

With a weaker political standing and less strategic ability, Takaichi is even less likely to succeed. Opposition parties will be able to make strong demands in exchange for their legislative support, without needing to risk their reputation by joining a coalition with the weakened LDP.

The post-war era was largely characterised by an international order managed by the US. For Japan, this period was defined by the LDP’s domination of Japanese politics. The weakening of the post-war order was gradual but came to a definitive end on 20 January 2025 when Donald Trump was sworn in for his second term. Though Trump is not the first president to challenge some of the assumptions of the post-war order, he is the first to advocate its wholesale replacement by implementing the Project 2025 blueprint for his America First policy.

The post-war system was built on the commitment that allies should benefit together and negotiations were not a zero-sum game. Trump rejects this framework entirely – he is a zero-sum negotiator who wants to win all the chips. He has succeeded far more than most people expected, forcing punishing tariffs on allies and demanding tribute in the form of multi-billion-dollar blank tickets for him to invest as he wishes, as with the US$550 billion cheque cut by the government of Japan.

The Japanese people know all too well the importance of maintaining a strong security relationship with the US. But they also worry about the consequences of declining US leadership, the credibility of its commitments and the unpredictability of its foreign policy strategy.

This presents both opportunities and challenges for Japan. The Trump administration’s elimination of USAID and support for soft power programs leaves a void in humanitarian assistance and economic development aid that Japan can help fill. Trump’s lack of interest in supporting free trade presents Japan with the opportunity to lead an effort to expand CPTPP membership and strengthen international economic and security co-operation. Yet, so far, such discussions remain rare in Japan.

Japan’s leadership vacuum comes at the precise moment when it needs a new strategic vision, as the international order that enabled its prosperity and security dissolves. The question is whether Japan’s political leaders can muster the courage and imagination to take risks and develop new strategies to deal with the host of domestic and foreign policy challenges facing the country.

Without doing so, Japan’s standard of living, quality of life and global significance will slowly — gently and calmly perhaps, but assuredly — diminish.

Republished from East Asia Forum, 12 October 2025

The views expressed in this article may or may not reflect those of Pearls and Irritations.