Former Economic Security Minister Sanae Takaichi speaks during the Liberal Democratic Party (LDP) Presidential Election Candidate Debate at Japan National Press Club in Tokyo, Japan, on Sept. 24, 2025. Jia Haocheng/Pool via REUTERS

TOKYO (Reuters) -Sanae Takaichi, a contender to become Japan's next prime minister and the country's first woman leader, proposed fiscal spending to support investment in essential sectors such as food, energy and economic security.

While reiterating the need for a stimulus package to mitigate the rising cost of living, Takaichi said the more fundamental issue was to boost Japan's low growth potential.

Takaichi said if she became prime minister, the government would work with businesses and academics to come up with a framework for boosting investment to sectors key to Japan's crisis management.

"The core of this framework is 'crisis management investment'. This involves the state proactively providing financial support to essential sectors to minimise risks to our nation," such as economic, food, energy and national security, she said in a commentary to U.S. think tank Hudson Institute on Wednesday.

She identified artificial intelligence (AI), semiconductors, nuclear fusion, materials, biotechnology, advanced medicine and defence as among such sectors.

"In these fields, we aim to create a virtuous cycle of crisis management and growth by strategically implementing responsible, proactive fiscal policies," Takaichi said.

"Of course, we will continue to pay close attention to fiscal discipline," she said. "The first priority is ensuring fiscal sustainability. To that end, we will monitor the markets and take appropriate measures to stabilise and reduce the debt-to-GDP ratio."

Known as an advocate of big fiscal spending, Takaichi is seen as among the frontrunners in Saturday's race to choose a successor to Prime Minister Shigeru Ishiba, who has decided to step down.

(Reporting by Leika Kihara; Editing by Kate Mayberry)