Tokyo Drifting?

2025 is shaping up to be a pivotal year for Japan.

The country is facing increasingly powerful calls for change after nearly eight decades of moderately conservative governance. In their two most recent elections, one in July and the other in November 2024, the Japanese people rebuked the ruling center-right Liberal Democratic Party (LDP) as a growing number of voters threw their support behind smaller, less-established parties. This marks a clearly shifting political landscape, as the party has held almost uninterrupted power since 1955. In response to these struggles, Prime Minister and LDP President Shigeru Ishiba recently announced his intention to step down, injecting further uncertainty into a volatile environment.

Japan, like many other nations, faces a daunting array of problems. Exit polls from July’s election showed that many of the issues are domestic. They include the rising cost of living, stagnant wages and mounting demographic concerns. More than perhaps any time in the past eight decades, however, international challenges are also shaping political discourse. With an increasingly aggressive China on its doorstep and a transactional administration in the White House, Japan is reckoning with profound questions about its role in the Indo-Pacific and its foreign policy more broadly. The country may well be headed into a new political era that will have spillover effects at home and abroad.

Past and Present

Japan has pursued a relatively predictable, steady foreign policy agenda since the end of World War II. The cornerstone of Tokyo’s approach has been its long-standing alliance with the United States. The relationship, initiated as a condition of the ending of U.S. occupation in 1952, has proved to be among the world’s most durable, flexible and consequential partnerships. The Treaty of San Francisco, which restored Japan’s sovereignty, allows the United States to station a large number of troops across the Japanese archipelago, the cost of which Tokyo underwrites. In return, Washington includes Japan in its “nuclear umbrella” and commits itself to supporting Japan if it is attacked. The alliance was initially controversial in Japan, but it has steadily grown in popularity as the two nations have drawn closer.

For decades, the agreement allowed Japan to develop an extensive and productive global network of partnerships while the United States took care of the bulk of Tokyo’s defense needs. Japan has subsequently been a leading driver of trade liberalization and economic integration, founding or otherwise participating in a wide range of multilateral forums, since its economic ascendance in the 1950s. The country has regularly been among the top five trading partners for the United States and the European Union, and plays a critical role in countless supply chains worldwide. At the same time, Japan has also become a leading provider of development assistance and infrastructure development, particularly in Southeast Asia and Oceania.

Rising Uncertainty

This approach to foreign policy has provided a wealth of benefits for Japan, but recent events suggest that domestic concerns may precipitate a shift to a new approach. The focus of many voters has turned to the combination of high inflation and stagnant wages that has contributed to a rising cost of living. This, in turn, has exacerbated the nation’s well-publicized demographic crisis as growing numbers are unable to afford having children. The economic woes have translated into rising discontent with the ruling LDP, culminating in a surge of support in the July election for Sanseitō, an ultraconservative, “Japanese First” party established in 2020. The Japanese, like their counterparts in many other democracies, are turning inward.

Factors abroad are also contributing to uneasiness. Across the East China Sea, Japan faces a more assertive, antagonistic China, seemingly determined to test Tokyo’s will at every opportunity. Geopolitical flashpoints continue to simmer on the Korean Peninsula and in the Taiwan Strait. Even the alliance with the United States, long the greatest source of Japan’s stability, has become a conundrum. President Donald Trump has shown little compunction about questioning long-standing bilateral norms. He has repeatedly criticized the alliance as “unfair”, complained about Tokyo’s trade policies and argued for significant increases in Japanese defense spending. These tensions have led some in Japan to question Washington’s reliability as a partner, particularly due to Trump’s erratic approach to tariff negotiations.

For Japan’s leaders, the path forward will be difficult as domestic and international developments mean staying the course is unsustainable. Political debates in Japan increasingly reflect the unprecedented times. A small but growing minority of officials has begun to discuss the possibility of developing a domestic nuclear arsenal, a topic long considered taboo. Others have seized on the notion of revising or reinterpreting Article 9 of the Japanese Constitution, which precludes the country from maintaining offensive military capabilities. And while many voters have expressed reservations about foreign engagements, the Japanese government has demonstrated a strong interest in expanding global partnerships, particularly with groupings such as the Quad and NATO. The European Union has also emerged as a key focus of Japan’s future foreign policy, as many officials in Tokyo push for enhanced bilateral ties. Their effort has only grown as perceptions of U.S. reliability have deteriorated. More substantive discussions with Brussels could mirror in foreign policy the pivotal changes rattling Japan’s domestic politics.

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