<figure id="attachment_452878" aria-describedby="caption-attachment-452878" style="width: 6000px" class="wp-caption alignnone"><a href="#" data-ident_hash="0fb9d277"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2026/01/49ccf7bdc9173dea24f0fadc4155f713.jpg" alt=""></a><figcaption id="caption-attachment-452878" class="wp-caption-text">Prime Minister Takaichi&#8217;s decision to dissolve his cabinet on the back of high approval ratings. Will he be able to bring this momentum to the LDP?</figcaption></figure>
<h3> Is the &#8220;LDP victory&#8221; forecast beginning to look shaky?</h3>
<p> The general election to be held on February 8 has begun. This is probably the first time that an election has been so unpredictable. The election campaign is difficult to predict, but one thing that can be said is that the &#8220;victory of the Liberal Democratic Party&#8221; is beginning to waver.</p>
<p> In a nationwide telephone poll of public opinion on the dissolution of the Diet conducted by the Asahi Shimbun newspaper on January 17-18, 36% of respondents were in favor of the dissolution and the general election, while 50% were opposed. Daily TV programs showed poster boards covered in snow in areas with heavy snowfalls and local government staff working hard to clear away the snow, and since the election coincided with the exam season, some people were skeptical as to why the election was being held now.</p>
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<p> Prime Minister Sanae Takaichi (64) probably relied on the high approval rating of her cabinet, which has remained at an exceptionally high level of 60-70% since the formation of her cabinet three months ago. Opinion polls allegedly taken by the LDP at the end of last year and in January of this year showed that the LDP had &#8220;won a landslide victory with 260 seats,&#8221; according to some rumors.</p>
<p><span class="strongInContent"> The question is whether Sanae Takaichi is the right person to be the prime minister. Now, the sovereign people of Japan must decide. That is the only way. That is what I thought.</span></p>
<p> Despite the parliamentary cabinet system, in which Diet members choose the prime minister, the prime minister presented an option that the people could not choose: &#8220;Me or no me. Despite the fact that the Diet members had announced this, the victory line was not &#8220;a majority of the Liberal Democratic Party alone,&#8221; but rather &#8220;a majority of the ruling party together with the Japan Innovation Party,&#8221; which is forming a coalition. Nevertheless, on January 26, at a debate hosted by the Japan Press Club, he made a show of saying, &#8220;If the LDP and the Japan Innovation Party do not win a majority, I will step down from office immediately.</p>
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<p><span class="strongInContent"> He had originally talked about passing the budget for fiscal year 2014, but put it on the back burner and decided to dissolve the Diet, saying, &#8220;I think we can win a big victory now. Considering the high cost of living of the people, the LDP should aim to pass the budget as soon as possible during the special Diet session after the election, but if it loses, the LDP will hold another presidential election. This is not a lower house election by Takaichi, for Takaichi, by Takaichi.</span></p>
<p> Although the dissolution was unexpected, a new party, the Chudo Reform Coalition (&#8220;Chudo&#8221;), was formed just before the election. Lower house members of the Constitutional Democratic Party of Japan and the New Komeito party left the parties to join the new party. Nakamichi stated that it would be &#8220;Sei-katsu-sha first,&#8221; and as the centerpiece of its pledge, it would permanently implement a zero consumption tax rate for foodstuffs with the profits from the management of a government-affiliated fund.</p>
<p><span class="strongInContent"> The consumption tax will be the main focus of this election. When talking about cutting the consumption tax, I wonder if we can talk about a set of financial resources. Only the middle-of-the-road party has proposed a consumption tax cut that clearly states the source of revenue, neither debt like deficit-covering government bonds nor a tax hike.</span></p>
<p><span class="strongInContent"> The LDP, on the other hand, has put forward a &#8216;two-year limited consumption tax rate of zero on groceries,&#8217; but until before the election they were using the private cash register system as an excuse, saying, &#8216;The cash register. When the opposition parties raised the issue of tax cuts, the pledge was ambiguous in its Kasumigaseki/Nagatacho syntax: &#8216;We will accelerate our consideration. Later, they stepped in with the statement, &#8216;We aim to cut taxes by the end of the fiscal year,&#8217; but they could not say that they would carry out the pledge.</span></p>
<div data-friday-nextpage-lead=" Is the Nakamichi&#39;s pledge to cut the consumption tax on food products possible?"></div>
<h3>A direct hit on the chairman of the policy board who led the pledge.</h3>
<p> However, there is also a question mark over the realization of the pledge of the middle road. Can the fund&#8217;s investment profits make up for the ¥5 trillion in lost revenue over the long term? It is still fresh in our minds that the Norinchukin Bank failed in its investment in the fiscal year of 2012, resulting in a large deficit of 1.8078 trillion yen. We interviewed Mr. Mitsunari Okamoto, 60, Chairman of the Joint Policy Research Committee, who has worked at Citibank and Goldman Sachs and who led the pledge.</p>
<p> Can the fund&#8217;s investment income make up for the ¥5 trillion in lost revenue over the long term?</p>
<p><span class="strongInContent"> The original problem is that in times of inflation, if you hold only yen without doing anything with it, it will only diminish in value. By utilizing the expertise of the General Pension Investment Fund (GPIF), we can generate stable returns.</span></p>
<p><span class="strongInContent"> The GPIF has a tremendous amount of risk diversification, so even if something goes down, it can be covered elsewhere. 25 years ago when we started the GPIF, there was criticism, but as the economy has developed, it has resulted in the increase in assets that we have today. We have had wars, earthquakes, and pandemics in the last 100 years, but even the wars were swallowed up and the economy grew.&#8221;</span></p>
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<p> -May there be short-term losses?</p>
<p><span class="strongInContent"> The GPIF does not buy or sell much, so dividends continue to come in, and even if the market valuation declines temporarily, the cash flow will support the fund. It is not that they are trying to make money, but it would be a waste to do nothing under the inflationary environment.</span></p>
<p> How much money do you need to generate ¥5 trillion in investment income?</p>
<p><span class="strongInContent"> The average yield of the GPIF over 25 years is about 4.2%. If a 200 trillion yen fund were created, 8 to 9 trillion yen would be the investment yield. About 2% of that will come from dividends, so we still need to discuss how to go about the denominator.</span></p>
<p><span class="strongInContent"> Politicians should not make such decisions during election campaigns, but rather include experts in the discussion because we want to create this kind of new financial resource. We are asking you in the election to let us discuss fiscal reform that is not limited to deficit financing or tax increases. I would like to get a push from all of you to say, &#8220;Okay, do it.</span></p>
<p><span class="strongInContent"> Rather than finding policy differences and arguing with each other, we should find areas of overlap and build consensus.</span></p>
<p> In the midst of a cold wind, Mr. Okamoto spoke politely and clearly to this reporter, using gestures and hand gestures. The fund may be an effective new source of revenue that does not rely on deficit-covering government bonds or tax hikes.</p>
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<p> Keishi Yamada, a commentator at Jiji Press commented, &#8220;The Nakamichi party concluded a joint statement on March 22 that the fund would be an effective source of revenue.</p>
<p><span class="strongInContent"> The Chudo just held its party&#8217;s convention on March 22, so the party name and philosophy have not yet penetrated even among independents. Will the party&#8217;s pledges penetrate the electorate in the short 16-day period between the dissolution of the party and the vote?</span></p>
<p> Mr. Takaichi made his first speech in front of JR Akihabara Station, where former Prime Minister Shinzo Abe had made his final speech many times. He was accompanied by both leaders of the Restoration Association, who wore green jumpers, but did not mention the ruling party&#8217;s pledge of a two-year limited consumption tax rate of zero, which would cover food products. When Takaichi, dressed in a dark blue suit, made a speech saying that he would quit as prime minister if he did not win a majority, supporters and opponents shouted. How will the voters judge?</p>
<figure id="attachment_455564" aria-describedby="caption-attachment-455564" style="width: 1108px" class="wp-caption aligncenter"><a href="#" data-ident_hash="79f0ae90"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2026/01/0c79f24cae41fd05c88aa137b6726b19.jpg" alt=""></a><figcaption id="caption-attachment-455564" class="wp-caption-text"> Election poster board covered with snow. How will they put up the posters (courtesy of Tadayo Tanabe&#8217;s office)?</figcaption></figure>
<figure id="attachment_455595" aria-describedby="caption-attachment-455595" style="width: 1477px" class="wp-caption aligncenter"><a href="#" data-ident_hash="0e596554"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2026/01/02d1bd2a79f8f356210e10707b206a50.png" alt=""></a><figcaption id="caption-attachment-455595" class="wp-caption-text"> Citizens opposing the election visited Takaichi&#8217;s street speech in front of JR Akihabara Station.</figcaption></figure>
<figure id="attachment_455566" aria-describedby="caption-attachment-455566" style="width: 1477px" class="wp-caption aligncenter"><a href="#" data-ident_hash="22b3cc49"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2026/01/85d2581835f738a22dc9184bf26cc642.png" alt=""></a><figcaption id="caption-attachment-455566" class="wp-caption-text"> Mr. Mitsunari Okamoto, Chairman of the Political Policy Bureau, rushed to support Ms. Harumi Yoshida, who ran for Tokyo&#8217;s 8th ward. He was also an executive officer of Goldman Sachs.</figcaption></figure>


 Daisuke Iwasaki

 Takeshi Kinugawa (1st photo)

 The House of Representatives election will be held on February 8. Prime Minister Takaichi is believed to have decided to go ahead with the election because of his cabinet's high approval rating, which has led to predictions of a major victory for the LDP, but these predictions of a major victory are beginning to look shaky. What is happening to the LDP now?

Has Prime Minister Takaichi &#8220;cut off&#8221; the people who are suffering from high prices&#8230; His true nature as manifested in his stance on the food consumption tax, an issue in the election?

Has Prime Minister Takaichi “cut off” the people who are suffering from high prices… His true nature as manifested in his stance on the food consumption tax, an issue in the election?

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