When Yoshihide Suga succeeded Shinzo Abe as Japan’s prime minister on September 14, many observers anticipated a shift in the government’s focus. Abe had forged his legacy over nearly eight years with an assertive, defense-centric foreign policy and the transformation of Japan’s national security policy. Suga, in contrast, is known for his expertise in domestic policy and might be expected to turn inward to tackle serious problems at home. But global challenges and choices will soon demand his attention. Will he be pulled in two directions?

Certainly, Japan’s domestic situation needs a leader with Suga’s experience. The economy shrank at an annual rate of 28% in the April–June quarter. His low-key, unobtrusive and dutiful role as Abe’s right-hand man — the longest-serving Chief Cabinet Secretary in Japanese history — has proven Suga incomparable when it comes to managing and deftly orchestrating the vast and powerful Japanese bureaucracy.

Suga has already signaled his reform agenda. His initial proclamations indicate his focus areas are to accelerate domestic economic stimulus plans and to “push ahead with deregulation and put an end to ministry sectionalism, vested interests and the practice of blindly following past precedents.” His Cabinet reflects a complementary blend of experience and new ideas. He retained Taro Aso (deputy prime minister and finance minister) and appointed Abe’s brother, Nobuo Kishi (defense minister), Toshimitsu Motegi (foreign minister), and Abe’s former foreign minister and recent defense minister, Taro Kono, as minister for administrative reform — one of Suga’s pet policy issues.

Aside from domestic economic issues, national security and foreign policy challenges loom ahead from a surging, economically muscular, and militarily assertive China and a suspiciously quiet North Korea. Will Suga continue increased defense budgets and other national security initiatives begun under Abe?

Difficult challenges remain which include missile and nuclear threats emanating from North Korea and increasing Chinese military incursions into Japanese national airspace and territorial waters. Compounding these challenges is the strategic distrust between the United States and China that has reached an all-time low at a time when Japan and the U.S. are redefining the 60-year-old alliance.

Suga will have to make critical choices in this environment. Reportedly, his government is revisiting the debate for defense options that may envision blending its traditional defensive posture with a potential complement of strike capabilities. Moreover, Japan must contemplate investments in the future dimensions of the 21st century battlespace — in the cyber, space, and electromagnetic domains. All of these choices will involve hefty costs in a time of fiscal austerity.

But Suga’s domestic and international objectives do not have to be mutually exclusive policy vectors. Japan is already forging ahead with closer regional ties in the Indo-Pacific Quadrilateral Security Dialogue — the U.S., Australia, India, and Japan security and defense federation. At the same time, the U.S.-Japan Alliance faces an opportunity to re-invigorate and synchronize strategic bilateral objectives. These, along with multilateral initiatives with South and Southeast Asia, could and should be enabled by a full complement of comprehensive trade, commerce, and economic policies as well as advanced technology cooperation in a consortium of “like-minded” advanced technology nations. By seeking connective and overlapping complementary policy initiatives, the U.S and Japan can shape an alliance that addresses strategic challenges both abroad and at home.

Dr. Paul M. Linehan is a Senior Fellow with CNA’s China & Indo-Pacific Security Affairs Division. With over 35 years of Federal service prior to his retirement, Dr. Linehan’s career with the Department of Defense focused on Asian security affairs.