Berliner Boersenzeitung - Japan's Takaichi formally reappointed as PM following election victory

Takaichi, 64, became Japan's first woman premier in October and won a two-thirds majority for her party in the snap lower house elections on February 8.

She has pledged to bolster Japan's defences to protect its territory and waters, likely further straining relations with Beijing, and to boost the flagging economy.

Takaichi suggested in November that Japan could intervene militarily if Beijing sought to take Taiwan by force.

China, which regards the democratic island as part of its territory and has not ruled out force to annex it, was furious.

Beijing's top diplomat Wang Yi told the Munich Security Conference on Saturday that forces in Japan were seeking to "revive militarism".

At a news conference Wednesday, Takaichi said she believed the election victory had shown the public wanted "important policy shifts".

Those included "responsible and proactive fiscal policy, a fundamental strengthening of security policy, and enhancing the government's intelligence capabilities", she said.

She plans to submit legislation to establish a National Intelligence Agency, she added.

And in a policy speech expected to take place Friday, Takaichi will pledge to update Japan's "Free and Open Indo-Pacific" (FOIP) strategic framework, local media reported.

"Compared with when FOIP was first proposed, the international situation and security environment surrounding Japan have become significantly more severe," chief government spokesman Minoru Kihara said Monday.

In practice this will likely mean strengthening supply chains and promoting free trade through the Trans-Pacific Partnership (CPTPP) pact that Japan is a member of alongside several major economies including Britain, Canada and Mexico.

Takaichi's will also begin concrete discussions towards an anti-espionage law, according to media reports.

- Revising 'Imperial Household Law' -

Takaichi told reporters Wednesday that revising the imperial family's rules, to ease a looming succession crisis, was "an urgent matter".

Many within her Liberal Democratic Party (LDP) oppose making it possible for a woman to become emperor, but rules could be changed to "adopt" new male members.

Discussions are currently underway in both houses of parliament on the issue, she said Wednesday, with the hope they "will advance toward revising" the law.

Her ruling coalition wants too to accelerate debate on changing the constitution and on Wednesday she vowed to seek reform.

Takaichi has also promised to tighten rules surrounding immigration, even though Asia's number two economy is struggling with labour shortages and a falling population.

On Friday, Takaichi will likely repeat her campaign pledge to suspend consumption tax on food for two years in order to ease inflationary pressures on households.

This promise has exacerbated market worries about Japan's colossal debt, with yields on long-dated government bonds hitting record highs last month.

Rahul Anand, the International Monetary Fund chief of mission in Japan, said Wednesday that debt interest payments would double between 2025 and 2031.

"Removing the consumption tax (on food) would weaken the tax revenue base, since the consumption tax is an important way to raise revenues without creating distortions in the economy," Anand said.

To ease such concerns, Takaichi again on Wednesday repeated her mantra of having a "responsible, proactive" fiscal policy and promised to reduce government debt.

She will also announce in her policy speech the creation of a cross-party "national council" to discuss taxation and how to fund ageing Japan's ballooning social security bill, media reports said.

But Takaichi's first order of business will be obtaining approval for Japan's budget for the fiscal year beginning on April 1 after the process was delayed by the election.

The ruling coalition also wants to pass legislation that will outlaw destroying the Japanese flag, according to the media reports.

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(L.Kaufmann--BBZ)