Yuichiro Tamaki, leader of the small but increasingly influential Democratic Party for the People (DPP), is on a mission to revitalize Japan’s sluggish economy, long burdened by deflation. Despite his roots as a former finance ministry bureaucrat, where he championed fiscal conservatism, Tamaki has come to believe that the country’s economic policies need a transformative shift beyond the established “Abenomics” framework.
Tamaki’s perspective changed upon reading a pivotal 2016 speech by then-Federal Reserve Chair Janet Yellen, who promoted a “high-pressure” economy—a model where strong demand and a tight labor market drive growth. Inspired, he described in a 2021 blog post how Yellen’s ideas provided clarity on a path forward for Japan, envisioning an economy driven by robust demand rather than conservative fiscal restraint.
Now, at 55, Tamaki advocates aggressive tax relief and welfare spending, aiming to rejuvenate demand and lift Japan out of its economic stagnation. His leadership could soon put these theories to the test: with the Liberal Democratic Party (LDP) and its coalition partner Komeito holding a fragile minority after the October 27 election, Tamaki’s cooperation may be key for Prime Minister Shigeru Ishiba’s administration to pass economic measures.
Yet Tamaki’s plans have sparked debate. While some economists argue his policies could indeed provide a much-needed boost, others caution that they may increase Japan’s substantial public debt, rattling investors and complicating the Bank of Japan’s delicate strategy to phase out decades of monetary stimulus.
A New Economic Approach from Unorthodox Roots
Born in a small town in western Japan, Tamaki pursued a law degree at the University of Tokyo before entering the finance ministry in 1993, right after Japan’s property and stock market collapse. After advancing to the LDP’s cabinet office under Prime Minister Junichiro Koizumi, he surprised many by defecting to the opposition, running unsuccessfully in 2005 but ultimately winning a seat in 2009.
Reflecting on his evolution away from fiscal conservatism, Tamaki pointed to Japan’s stagnant wages and economic malaise as proof of the need for a new approach. Unlike “Abenomics,” which increased government spending and money supply while hiking consumption tax, Tamaki argues for policies that prioritize demand, including a temporary halving of the consumption tax and cuts to the gasoline tax—proposals that have resonated with Japan’s younger voters. He has also urged the Bank of Japan to pause its interest rate hikes for at least six months.
Despite a recent scandal involving an alleged extra-marital affair, his party has stood by him, underscoring his rising influence in Japan’s political landscape.
The Cost of Change
As the LDP and Komeito consider the DPP’s proposals, the finance ministry has already warned that Tamaki’s income tax threshold increase could reduce tax revenues by over 7 trillion yen (US$46 billion). Tamaki, however, remains confident, pointing to Japan’s comparatively low inflation and recent tax revenue surpluses as justification for his policies.
While Takuya Hoshino, chief economist at Dai-ichi Life Research Institute, suggests Tamaki’s proposals could invigorate consumption, others see risks. Norihiro Yamaguchi, senior economist at Oxford Economics, warns that such policies could destabilize the bond market and burden future taxpayers. “This is a heavy fiscal load,” Yamaguchi explains, “and ultimately, someone has to bear the cost.”
Tamaki’s bold vision has positioned him as a central figure in Japan’s evolving economic debate, leaving the question of Japan’s future prosperity hanging in the balance.
