The Indicator from Planet Money How Japan’s new prime minister is jolting markets
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Dec 3, 2025 Sanae Takaichi's ascent as Japan's first female prime minister is stirring intrigue in global markets. Her focus on addressing the rising cost of living faces skepticism from the Bank of Japan, especially regarding interest rates. As Takaichi promotes a sizeable fiscal stimulus, opinions diverge on its potential to ease inflation or exacerbate it. Meanwhile, public sentiment appears mixed, with high approval ratings juxtaposed against economic uncertainties. Exploring productivity and immigration, the discussion hints at long-term growth challenges ahead.
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Inflation Opened A Political Door
- Japan moved from decades of deflation to noticeable inflation for the first time in about 30 years.
- That shift created political space for a bold new leader, Sanae Takaichi, promising radical change.
Everyday Strain In Kobe
- Julie Nguyen, a part-time mental health worker and single mother, says rising groceries and electricity are squeezing her household.
- Other Kobe residents echoed concerns about childcare, college costs, and immigration policy affecting daily life.
Central Bank Holds Inflation Lever
- Central banks, not politicians, mainly control inflation through interest rates.
- Lowering rates would ease loans but risks more spending and higher prices, countering anti-inflation efforts.