Japan’s ‘Iron Lady’ must continue to commit to global trade to combat debt
Japan’s ruling party leader, Sanae Takaichi, must maintain her countries commitment to global trade to combat spiralling government debt, say leading audit, tax and business advisory firm, Blick Rothenberg.
Yusuke Takanishi, a partner at the firm, said: “While Ms. Sanae Takaichi’s economic philosophy clearly channels elements of Thatcherite fiscal discipline, deregulation, and private-sector-led growth, she also proposes targeted state investment in strategic areas like technology, defence, and energy. However, her room for maneuverer is already constrained by Japan’s heavy debt burden.”
He added: “Central government debt exceeds ¥1,340tn as of August 2025. But maintaining Japan’s commitment to open trade and economic stability is a good way to prevent this fiscal pressure increasing, and even potentially alleviate it.”
Yusuke said: “Japan’s continued engagement through the UK–Japan Comprehensive Economic Partnership Agreement (CEPA) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) frameworks underscore its preference for rules-based commerce over protectionist shocks. Sanae Takaichi and the UK prime minister, Keir Starmer must continue to lower Japan UK trade barriers and encourage mutual investment in each other’s economies.”
He added: “However, with the Komeito party announcing its withdrawal from the coalition with the Japanese Liberal Democratic Party, the government loses a stabilising coalition partner, making policy execution more delicate and subject to parliamentary fragility. With the coalition fractured, uncertainty over trade, taxation, and tariff policy will increase.”
Yusuke said: “Ms. Takaichi must avoid the tariff and protectionism approach to trade that president, Donald Trump has taken. This has strained global supply chains, heightened uncertainty and damaged relationships with key allies. Stable trade relations are the key to a stable economy.”
He added: “Japanese firms operating in the UK must seize this moment to reexamine customs frameworks, transfer pricing structures, and incentive schemes. A flexible strategy that can adapt to rapid shifts in governance will be essential.”