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To understand how the Takaichi government will function, it may be more important to look at her“inner cabinet” – senior posts in the prime minister's office – rather than the cabinet itself.

This group of officials, including the chief cabinet secretary, the deputy chief cabinet secretaries, and the prime minister's secretaries, aides, and advisors, does much of the work formulating policy across ministries, shaping the prime minister's decision-making process, setting priorities, gathering information from across the government, imposing the prime minister's decisions on the bureaucracy, and coordinating with ruling parties.

This group is more uniformly conservative than the cabinet, including members of both Sosei Nippon, the group of conservative lawmakers that was instrumental in Abe's comeback in 2012, and several Takaichi-led study groups. Chief Cabinet Secretary Kihara Minoru, a former defense minister, is a longstanding member of Sosei Nippon.

Both of the deputy chief cabinet secretaries, an important role for cultivating future leaders, are also Takaichi loyalists. Ozaki Masanao, the deputy chief cabinet secretary from the House of Representatives, was one of Takaichi's endorsers this year and is a member of Sōsei Nippon.

Sato Kei, the deputy CCS from the House of Councillors, endorsed Takaichi in 2024 and has been a member of several study groups she has led as well as of Sosei Nippon. Another endorser, Matsushima Midori, will serve as Takaichi's aide for foreign population issues.

Of course, there are conservatives in the cabinet too – Katayama, Digital Affairs Minister Matsumoto Hisashi, Education Minister Matsumoto Yohei, and Minister for Special Missions[1] Kikawada Hitoshi have all been members of Sosei Nippon – but the coloration of the inner cabinet can shape the direction of the government in significant ways depending on how Takaichi uses this group.

They could be balanced to a certain extent by executive secretary Iida Yuji. Takaichi, like both Abe and Kishida, chose a former senior official from METI for this multifarious role, which can include supporting the prime minister's political decision-making but also managing the bureaucracy. Iida left METI in July after two years as the administrative vice minister, the top bureaucratic post in the ministry.

Unusually, she is also bringing a secretary over from the LDP headquarters staff, Tachibana Shigeaki. Meanwhile, she also made changes to other key administrative posts in the prime minister's office, replacing Okano Masataka, head of the National Security Secretariat, with Foreign Ministry Official Ichikawa Keiichi, and naming Defense Ministry official Masuda Kazuo as emergency management lead in the cabinet, a break with the precedent of having National Policy Agency officials in the role.[2]

Ultimately, the biggest question Takaichi faces is how her government will balance between Takaichi's own preferences, the conflicting pressures and policy divisions within the LDP (present within the cabinet), and the need to work with Ishin no Kai to ensure that the government's external partner remains satisfied with the LDP minority government.

Policy boldness, political challenges notwithstanding

In her press conference late Tuesday evening, Takaichi sought to send the message that her government is breaking sharply with the Ishiba government on key issues.

First, she ordered her government to begin work on a stimulus package centered around policies to combat the rising cost of living, including ending the provisional gasoline tax, raising the income tax exemption, and introducing a refundable tax credit policy – though it is unclear how the stimulus will be financed.

She also signaled that her government will be guided by the idea of“responsible expansionary policy,” and sent a message to the Bank of Japan (BOJ), stating that she will aim for“mutual understanding” with the bank but that she has no intention of revising the 2013 accord between the government and BOJ aimed at“overcoming deflation.” She said that with an eye towards delivering economic relief, she is not thinking about a snap election at this time.

However, she may have sent a more significant message on defense spending. Consistent with the overall tenor of the LDP's pact with Ishin no Kai – discussed here – she said she intends to move quickly to revise the three national security documents, last updated in December 2022 and not due for revision until 2027, as part of laying the groundwork for raising defense spending beyond the 2% of GDP.