Japan’s ruling party leader Sanae Takaichi boosted her chances of becoming prime minister after agreeing on policy talks with the Japan Innovation Party (Ishin), negotiations that may lead to the formation of a new coalition.

An alliance between the two parties would likely secure the premiership for Takaichi and provide a more stable platform for governance, while dashing opposition hopes of rallying around a unified candidate to oppose her such as Yuichiro Tamaki of the Democratic Party for the People.

The two parties are set to hold talks Thursday afternoon to determine whether there is enough alignment on policy to warrant a broader coalition. At a meeting with Ishin lawmakers in parliament on Thursday morning, co-leader Fumitake Fujita said he encountered no major opposition to the idea of joining the LDP in a coalition.

“Ultimately, I believe it comes down to comparing the policy discussions, the alignment of values, and how much we can truly guarantee their implementation,” Fujita said. “The final decision on that matter will be made at the party leadership level.”

Entering a power-sharing arrangement would help raise the national profile of Ishin beyond its power base in the western prefecture of Osaka. Ishin’s conservative politics may also help solidify a political tilt to the right by a potential Takaichi administration.

A partnership would give the LDP an additional 35 seats in the lower house — still two seats short of a majority but well ahead of any opposition bloc.

Policy Proximity

The LDP and Ishin already have a record of cooperation and their policies are close on the spectrum of Japan’s political parties. Still, some existing Ishin policies, such as reducing the sales tax, would be costlier than measures so far envisaged by the LDP.

Ishin backed the annual budget for the current fiscal year after securing commitments from the LDP on free high school education and reduced social insurance premiums. They are seeking to revamp the social insurance system and already have an agreement in place with the LDP and Komeito on revising the extent medicine is covered by insurance.

The party is now pushing its “second capital” initiative, which aims to offer up Osaka as an alternative to Tokyo in case of natural disasters and other risks. Ishin’s co-leader Hirofumi Yoshimura said Wednesday that Takaichi is on board with the initiative.

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Ishin is also generally aligned with the LDP in its foreign and security policy stances, including support for the government’s current plan to boost defense spending to 2 percent of gross domestic product by 2027 and for Japan to play a role in upholding the international democratic order.

The party also backs the LDP’s long-running goal of revising the constitution to state Japan’s right to possess a military, though such a move would require the backing of two-thirds of parliament before it could proceed to a national referendum.

Still, some differences remain between the two parties, particularly on party funding. That’s an issue that the LDP has struggled with following a slush fund scandal that rocked the party and battered its public support. Its previous coalition partner, Komeito, exited a 26-year-long partnership over the issue last week.

Ishin has called for a ban on political donations from businesses and organizations, at odds with the LDP’s stance to keep and instead increase transparency over such donations.

The Osaka-based party also campaigned on a platform of scrapping the sales tax on food for two years and providing tax credits to low-income households. Cutting the sales tax would likely raise eyebrows from some parts of the LDP, which has so far been reluctant to cut taxes out of concern over Japan’s fiscal health.

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If Takaichi successfully courts Ishin, the prospect of any opposition candidate having a realistic chance of winning the prime minister vote would largely vanish.

While much attention has focused on efforts by the Constitutional Democratic Party, Ishin and the DPP to reach an agreement that led to the fielding of a unified candidate, the ruling party has been reaching out not only to Ishin, but also to the DPP. Those efforts intensified after the collapse of its partnership with Komeito.

The secretaries-general of the LDP and DPP met on Tuesday, during which the LDP called on the DPP to “form a new framework for cooperation for political stability.” But the DPP looks reluctant.

“If Ishin joins the ruling coalition, then there’s really no need for us to join too,” Tamaki said during a live YouTube stream on Wednesday, following Ishin’s announcement that they would weigh a potential alliance with the LDP.