Takaichi's Approval Rating Slips Amid Inflation Fears and Market Volatility

Japanese Prime Minister Sanae Takaichi's approval rating has taken a hit due to rising living costs, according to a recent poll by Yomiuri newspaper. The approval rating fell to 57% in July, down from 69% in June and the first time it has dropped below 60% since she took office.

The slump in popularity comes as Takaichi's expansionary fiscal and monetary policy bias continues to cause a spike in bond yields and a slump in the yen to four-decade lows. This has led to market pressures and opposition from within her own ruling party, delaying the government's decision on whether to cut an 8% levy on food sales.

Kyodo news agency reported that Takaichi may reshuffle her cabinet in August or September, which could send a message about the direction of her reflationist policies. Analysts expect core inflation to climb back above 2% later this year, as the recent surge in producer prices filters through to the broader economy.