Key facts
- Prime Minister Sanae Takaichi's cabinet approval rating fell 10 points to 58% in a Nikkei poll.
- This marks the first time the approval rating has dropped below 60% since Takaichi took office.
- A separate Yomiuri poll indicated Takaichi's approval rating at 57% in July.
- Disapproval of the administration's efforts to combat rising living costs reached 71% in the Yomiuri poll.
Prime Minister Sanae Takaichi's administration saw its approval rating slump to 58% in July, a 10-point drop from June and the first time it has fallen below 60% since she took office. The Yomiuri newspaper reported that disapproval rose to 34% from 21% in June. A significant 71% of respondents in the Yomiuri poll disapproved of the government's efforts to combat rising living costs, up from 56% previously.
Other recent polls have also indicated a decline in Takaichi's popularity. Kyodo news agency reported that a cabinet reshuffle might occur in August or September. Kenji Yamamoto, chief market economist at Daiwa Securities, noted that while Takaichi's approval ratings remain high compared to past administrations, the political capital gained from an election victory is diminishing. The focus is now on the direction of her reflationist policies, which may be signaled through a cabinet reshuffle.
The Bank of Japan raised interest rates to 1% in June, but real borrowing costs remain negative due to inflation hovering around the 2% target. Government fuel subsidies have helped keep core consumer inflation below 2% for five consecutive months, though analysts expect it to rise above 2% later this year as producer price increases filter through the economy.