Thailand’s opportunity in the Takaichi era as Japan launches “Japan is back”

Chanthapat Panjamanond, Minister (Commercial) at the Office of Commercial Affairs in Tokyo, spoke to Thansettakij about the policy trajectory of Sanae Takaichi, Japan’s first female prime minister. 

Takaichi, widely seen as a conservative politician with a strong security focus, worked closely with former prime minister Shinzo Abe, architect of the “Abenomics” reforms that helped lift Japan out of more than two decades of economic stagnation.

Takaichi has set out an agenda titled “Japan is back”, seeking to restore Japan’s economic dynamism and global influence at a time of slowing growth and a persistently weak yen. 

Central to her strategy is fiscal stimulus through a substantial increase in public investment across 17 priority industries, including semiconductors, artificial intelligence, shipbuilding, aerospace and defence. The aim is to overhaul Japan’s industrial base and re-establish the country as a global leader.

A further priority is to strengthen food and energy security, as Japan currently imports 62% of its food and 95% of its energy. The government intends to boost domestic food production and expand energy generation — including nuclear and renewable sources — to reduce reliance on foreign imports.

Geopolitics: Japan leaning towards the US – and reducing dependence on China?

Chanthapat noted that, amid escalating tensions between the United States and China, Japan appears to be moving closer to Washington. This follows the historically warm Abe–Trump ties and the recent signing of a critical minerals cooperation agreement aimed at reducing dependence on Chinese supply chains.

Relations with China, however, have become increasingly strained after Takaichi signalled support for Taiwan. Beijing subsequently issued a travel warning, urging its citizens to avoid Japan. 

This carries major implications, as Chinese tourists were the largest inbound group to Japan in the first nine months of 2025, totalling 7.49 million visitors.

The dispute is expected to cost Japan’s tourism industry 2.2 million yen and could spill over into trade and supply-chain relations. As Chanthapat emphasised, geopolitics and trade can no longer be treated as separate issues.

A weakening yen and shrinking domestic purchasing power

Japan is facing rising living costs driven by the yen’s historic depreciation, while wages have been slow to adjust. Households have therefore adopted more cautious spending habits, causing domestic purchasing power to decline steadily. 

Government measures — such as reduced fuel taxes, extended income-tax exemptions and subsidies for utilities — may have only limited effect. According to Chanthapat, the issue is not that Japanese people “lack money”, but that they are hesitant to spend it.

Japan’s weak currency stems from interest rates that remain far below those of the United States, leading to capital outflows. Coupled with high public debt, the Bank of Japan has little room to raise rates. Takaichi herself has made clear that she favours a weaker yen to support the export sector.

“As a result, domestic purchasing power is unlikely to recover soon,” Chanthapat said.

Implications for Thai exports

Although Japan aims to boost domestic food output, such efforts will take time. If current geopolitical trends continue, Japan may prioritise cooperation with the United States and expand imports of American agricultural products — a shift that could threaten Thai exporters, particularly Thai rice.

However, Japan–China tensions may benefit Thailand in other ways.

A reduction in Chinese travel to Japan could redirect more Chinese visitors to Thailand, and declining Japanese reliance on Chinese imports may create opportunities for Thai products to gain market share. Sectors with strong potential include industrial components, clothing and textiles, and seafood, fruit and vegetables.

Japan imported a total of 112 trillion yen in goods in 2024, nearly a quarter of which came from China. Any move by Japan to reduce Chinese imports could open valuable market space for Thailand.

Using a “demand-led” strategy to penetrate the Japanese market

Even though Japanese households are tightening their budgets, products that genuinely match consumer preferences continue to perform well. 

Commerce Minister Suphajee Suthumpun is promoting a “Demand-Driven Economy”, encouraging Thai producers to shift from supply-led to demand-led production using market intelligence to understand foreign consumer behaviour.

The Office of Commercial Affairs in Tokyo has adapted this strategy, especially for agricultural producers and community enterprises. One success story involves Thailand’s Gros Michel bananas, which paved the way for introducing the Cavendish variety. 

Working with the Department of Internal Trade, the office identified the specific cultivar favoured by Japanese consumers and encouraged Thai farmers to grow it exclusively for the Japanese market.

Another example is the Thai textile initiative under Her Royal Highness Princess Sirivannavari’s “Pha Thai Sai Hai Sanuk” (Thai Fabric, Fun to Wear) project. 

Earlier trials have now led to a collaboration with OMIYA, a major kimono retailer, to create a collection of Thai-fabric kimonos for nationwide distribution. The line will be officially launched in Japan on November 25.

Transforming Thai textiles into kimono fabric not only increases value-added but also ensures consistent, high-volume demand, as a single kimono requires 19 metres of fabric. Even before launch, 516 orders worth 11.6 million yen have already been placed, promising sustainable income for weaving communities.

“These cases demonstrate our ability to achieve short-term stimulus with long-term gains. The next step is to broaden orders and income opportunities for more communities,” Chanthapat said.