Japan: How a tax-cut promise and snap election dent Sanae Takaichi’s popularity

Tax cuts and snap vote backlash

Japanese Prime Minister Sanae Takaichi’s once-soaring approval ratings have eased as voters express growing unease over a proposed tax cut and the lack of clarity on how it would be funded, according to media surveys published on Monday.

Support for the nationalist leader’s government slipped to 67 per cent from 75 per cent in December, dropping “below 70 percent for the first time since she took office last October”, a weekend poll by the Nikkei newspaper showed. The survey was based on responses from 977 people.

The decline follows criticism of Takaichi’s decision to call a snap election for February 8, little more than a year after the previous lower-house election in October 2024, which was meant to serve a four-year term.

Takaichi, Japan’s first woman prime minister, has argued that the vote is needed to test public backing for her leadership and her newly formed coalition government.

After taking office three months ago, she was forced to quickly assemble a governing alliance between her Liberal Democratic Party and the Japan Innovation Party (JIP) to secure a narrow majority in the influential lower house.

A victory in the early election would also strengthen her mandate, even as the LDP continues to struggle with weak public support and a series of scandals.

Central to Takaichi’s campaign is a pledge to scrap the consumption tax on food for two years, echoing opposition proposals to reduce taxes in an effort to ease the burden on households hit by inflation.

However, she has yet to spell out how the measure would be financed.

“My hope is to lower it as early as possible,” she said on Monday while discussing the consumption tax during a televised panel with opposition leaders, adding that she wanted to establish a public committee to examine the issue.

Financial markets reacted nervously to the prospect of tax cuts last week, with bond prices already under pressure from Takaichi’s large stimulus plans and concerns about rising debt and fiscal slippage.

Takaichi said Monday she was paying "considerable attention to fiscal sustainability".

Yoshihiko Noda, co-leader of the newly formed Centrist Reform Alliance opposition party, said during the panel that "we want to clearly indicate the funding sources (for the tax cut) and work to make this happen by autumn".

"The biggest issue (of the campaign) is, after all, rising prices."

'Voters leaving Takaichi'

"But 56 percent of respondents to the new Nikkei poll said they did not think a zero tax rate on food would be effective against rising prices," the business daily said.

A similar weekend poll by the liberal Mainichi Shimbun also showed Takaichi's approval rating drop to 57 percent from 67 percent seen in December.

The Mainichi, which received 2,048 responses, said many people were frustrated over the abrupt election, as it slowed down legislative debates on a new government budget before the Japanese fiscal year ends in March.

Ryutaro Kono, chief economist at BNP Paribas, wrote in a note that "the surveys... suggest that the prime minister's popularity does not necessarily translate into a significant increase in votes for the Liberal Democratic Party".

"Delaying the passage of the budget to proceed with the general election likely caused a significant number of supporters to leave (Takaichi)."

However, the main opposition still appeared unable to shore up their standing in the eyes of voters, he wrote.

The latest poll by the top-selling Yomiuri Shimbun (with 1,034 responses) also said the government's popularity fell four points to 69 percent, with many people hoping to see more economic programmes to deal with soaring prices.