Japan PM Takaichi's approval rating slides as inflation bites
The weakening yen, higher bond yields, delayed tax relief and public frustration over the cost of living are adding pressure on Japanese Prime Minister Sanae Takaichi and her government as a cabinet reshuffle looms.
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TOKYO: The approval rating of Japanese Prime Minister Sanae Takaichi's administration slumped in July to the lowest level since she took office last year, the Yomiuri newspaper reported on Sunday (Jul 26), a sign that rising living costs are hitting her popularity.
The sliding popularity adds to headaches for Takaichi, who has seen her expansionary fiscal and monetary policy bias cause a spike in bond yields and a slump in the yen to four-decade lows.
Such market pressures and opposition even from within her own ruling party have delayed the government's decision on whether and when to cut an 8 per cent levy on food sales – a pledge Takaichi made to cushion the blow from rising living costs.
In a poll conducted between Jul 24 and Jul 26, the approval rating for Takaichi's administration fell to 57 per cent, down from 69 per cent in June and the first time it has dropped below 60 per cent since she took office, Yomiuri said.
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The percentage that disapproved of her administration rose to 34 per cent from 21 per cent in June, the newspaper said.
Those polled who disapproved of her administration's efforts to combat the rising costs of living rose to 71 per cent, up from 56 per cent, it said.
Other recent media polls have also seen Takaichi's approval ratings slide. Kyodo news agency reported on Friday that Takaichi may reshuffle her cabinet in August or September.
Kenji Yamamoto, chief market economist at Daiwa Securities, said: "Her approval ratings remain high compared to past administrations, so it's not as if Takaichi's political grounding is shaking.
"But it's also true the enormous political capital she gained from the lower house election victory is gradually diminishing."
The focus now would be on what message Takaichi sends through the cabinet reshuffle on the direction of her reflationist policies, he added.
The Bank of Japan (BOJ) raised interest rates to a 31-year high of 1 per cent in June, though real borrowing costs remain negative with inflation hovering around its 2 per cent target for nearly four years.
Government fuel subsidies helped keep core consumer inflation below the BOJ's 2 per cent target for a fifth straight month in June. But analysts expect core inflation to climb back above 2 per cent later this year, as the recent surge in producer prices filters through to the broader economy.
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