Japan is on the brink of a historic political transformation as Sanae Takaichi, a prominent figure from the ruling Liberal Democratic Party (LDP), moves closer to becoming the nation’s first female prime minister. This milestone follows the LDP’s decision to form a coalition with the Japan Innovation Party (JIP), announced just hours before the lower house vote on Takaichi’s appointment. Despite the coalition still lacking two seats for a majority, Takaichi is expected to secure the premiership in a second-round run-off vote, where she only needs to outpace her competitor. Takaichi, a 64-year-old China hawk and traditionalist, recently won the LDP leadership but faced setbacks after the collapse of the party’s long-standing alliance with Komeito. The latter cited concerns over Takaichi’s hardline stance on China and her visits to the controversial Yasukuni Shrine, which honors war criminals. The new coalition has already sparked optimism in financial markets, with the Nikkei 225 index surging over three percent to a record high. Analysts attribute this to expectations of Takaichi’s proactive fiscal policies, reminiscent of the ‘Abenomics’ approach championed by her mentor, former Prime Minister Shinzo Abe. However, Takaichi’s administration will face significant challenges, including navigating U.S. President Donald Trump’s upcoming visit, addressing Japan’s demographic crisis, and revitalizing its stagnant economy. Additionally, the coalition will need to collaborate with other parties to pass legislation, as it lacks a majority in both parliamentary houses. The JIP has proposed policies such as eliminating the consumption tax on food and reducing the number of lawmakers, signaling a potential shift in Japan’s political landscape.