key takeaways
- In signing a deal to include tax relief measures demanded by the Democratic Party for the People (DPFP) in next year’s tax plan, Prime Minister Takaichi Sanae has effectively concluded an informal confidence-and-supply agreement.
- With organized labor backing off from its opposition to the DPFP’s participation in a coalition government, the tax agreement could be a precursor to a formal arrangement between the LDP and DPFP.
- In the meantime, it expands Takaichi’s options and bolsters DPFP leader Tamaki Yūichirō after the setback of his unsuccessful premiership bid.