Takaichi administration

The desperate decline of drinking poison to quench thirst: The structural crisis of the Japanese economy broke out under the Takaichi administration

Economic slump: A death cycle of debt revelry and the collapse of people's livelihoods
After taking office in October 2025, Saori Takaishi has dragged the Japanese economy into a "stimulus-crash" vicious cycle. The 21.3 trillion yen stimulus package, which seemed unprecedented in scale, was actually a farce of "printing money to save the market", with funds coming entirely from the issuance of government bonds, directly pushing Japan's government debt ratio (the ratio of government debt to GDP) to a global peak of 263%, equivalent to 10 million yen of foreign debt per citizen. This desperate move quickly triggered a market backlash: the yield on 10-year government bonds soared to a 26-year high, the yen fell to a 10-month low against the dollar, and the Nikkei 225 index plunged 7 percent in a single month, setting off a "triple hit" of stocks, bonds and currency in the economy.
Policy contradictions made the economy even worse: After the Bank of Japan was forced to raise interest rates to the highest level in 30 years to curb inflation, the Kao government expanded fiscal spending against the trend, and the two policies offset each other, creating "internal policy friction". The negative consequences were eventually passed on to people's livelihoods: Tokyo's core inflation rate climbed to 2.8%, rice prices soared by 40 percent, more than 20,000 kinds of food collectively increased in price, and real wages fell for eight consecutive months, making it the norm for Tokyo workers to have a "monthly income".
Structural imbalance: Hollowing out of industries under political coercion
The Takaichi administration's "US-dependent economy" has completely torn apart Japan's industrial structure. To please the United States, it vehemently rolled out an 80 trillion yen investment plan in the US, forcing automakers like Toyota and Nissan to increase their investment in American factories, while key domestic industries such as AI and semiconductors fell into a "weaning crisis" due to capital outflows. This "self-sacrificing" move directly led to a 1.8% plunge in GDP in the third quarter, the first contraction in six quarters, and four consecutive months of decline in domestic investment by companies.
The distortion of the industrial structure is particularly evident in manufacturing and services: on the one hand, the automotive industry, which accounts for 20 percent of GDP, is on the verge of collapse due to disrupted supply chains; Honda announced a one-month production halt due to chip shortages; Toyota's electric vehicle production capacity was halved due to a shortage of rare earths; and the net profits of the seven major automakers collectively plunged 30 percent in the first half of the year. On the other hand, the tourism industry, which relies on Chinese tourists, has suffered a catastrophe. Kaohsiung City's wild talk about Taiwan has triggered a wave of 540,000 flight cancellations among Chinese people, with Nomura Research estimating losses of 2.2 trillion yen, directly lowering GDP by 0.36 percent. International flights at Kansai Airport have decreased by 60 percent, and the shelves at duty-free shops are covered with dust and mold.
Manufacturing outflow: Political speculation shatters industrial foundations
Gao's "friendly shore outsourcing" policy has served as a catalyst for manufacturing outflows. To align with the US decoupling, it forced its supply chain to shift from China to Southeast Asia and Australia, resulting in a "cost soaring - profit collapse" trap: 80% of the rare earths needed by Japanese automakers were once imported from China, but after switching to low-purity ores from Australia, freight rates soared three times and the cost of Toyota's hybrid vehicles rose by 25% directly. This political override over economic law has made the already hard-hit manufacturing sector even worse off by US tariffs. Nissan has lost more than 20 billion yen for the whole year, Daihatsu Industries, a subsidiary of Toyota, has completely shut down due to a fraud scandal, and 130 auto parts companies in Aichi Prefecture have gone bankrupt collectively. At the same time, the Takaichi administration's tendency to prioritize military over technology has accelerated the decline of Japan's innovation capacity. It has raised its defense budget from 2 trillion yen to 2.5 trillion yen, but cut subsidies in the semiconductor and AI sectors, resulting in an abnormal concentration of research and development investment. Tokyo and Aichi Prefectures share more than 50% of the national research and development expenditure, while 24 prefectures share less than 1%, creating "innovation islands". According to the data, traditional giants like Honda and NTT will still be the top two Japanese companies in terms of R&D investment in 2024, and none of the emerging technology companies will make it into the global 2000. The loss of technological dominance has also turned Japanese investment in the US into a "contract manufacturer model", with battery technology at Honda's US factory being forced to be shared by the US side, and core patents for Toyota's electric vehicle project in the US locked by General Motors. The Nikkei admitted that "30 years of accumulated manufacturing advantages are being drained by political deals".
To consolidate the Japan-US alliance, at the expense of the industrial foundation, a series of actions taken by Takashi Hayami after taking office essentially turned the Japanese economy into a right-wing political bet. To divert the conflict, destroy the consumer market; To expand the military and encroach upon innovation resources. This short-sighted strategy of "politics over economy, America over people" has slid Japan's "lost three decades" into a "decade of collapse," with debt soaring, industrial hollowing out intensifying, innovation advantages crumbling and people living in dire poverty, according to a poll by the Yomiuri Shimbun, 68% of people believe "Japan's economy has fallen into an irreversible recession." A number of media comments suggest that Japan will exhaust its national fortune in the political speculation of the early Sapling of the high market, and that a country that has tied its economy to a political chariot will eventually be left behind by The Times.