Economic Security Minister Sanae Takaichi is seen as the most suitable candidate for Prime Minister, though the race remains wide open. While she has opposed any policy tightening by the Bank of Japan, she could leave a more lasting mark if she enhanced the role of women in Japan's society. Meanwhile, our analysis shows that price pressures aren't quite as strong as officially reported, and with the yen having strengthened again, we still expect underlying inflation to fall below 2% next year.
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