TOKYO — Japan’s governing party elected Sanae Takaichi as its new leader on Saturday, setting her up to become the U.S. ally’s first female prime minister.

Takaichi defeated Shinjiro Koizumi 185 to 156 in a second-round runoff vote to become leader of the conservative Liberal Democratic Party (LDP), which has governed Japan almost uninterrupted since the end of World War II.

The leadership race was triggered last month when Prime Minister Shigeru Ishiba said he would step down after a year in office. Though Takaichi is likely to succeed him as prime minister of Japan, the world’s fourth-largest economy, when parliament votes later this month, it is not guaranteed since the LDP-led coalition lost its majority in both houses in the past year.

“Right now, rather than feeling happy, I truly believe this is where the real challenge begins,” Takaichi said in her victory speech. “There is a mountain of work we must all tackle together.”

She also said it was important to make the LDP, which has been tarnished by corruption scandals, “a more spirited and vibrant party, a party that transforms people’s anxieties into hope.”

Takaichi, 64, a hard-line conservative who says her hero is former British leader Margaret Thatcher, was an ally of assassinated former Prime Minister Shinzo Abe, Japan’s longest-serving leader.

Though many party members welcome Takaichi’s ascendance as a potential return to the days of Abe, there are concerns that her nationalistic historical views could cause friction with East Asian neighbors China and South Korea.

One of the top priorities for Japan’s next prime minister will be implementing the trade deal reached with the Trump administration in July. The agreement, which imposes a 15% U.S. tariff on Japanese goods including its crucial auto exports, has yet to be put in writing and many of the details remain unclear.

Takaichi has raised the possibility of reopening talks on the deal, which includes a pledge by Japan to invest $550 billion in the U.S.

The LDP voted on five leadership candidates in the first round, with Takaichi securing 183 votes to Koizumi’s 164. Yoshimasa Hayashi, 64, the top spokesperson for the current Japanese government, came third with 134 votes after a recent surge in polls.

Votes in the first round were divided evenly between 294 LDP lawmakers and almost 1 million rank-and-file party members who were represented by 295 votes. Lawmakers favored the more moderate Koizumi, while party members preferred Takaichi, who has a passionate base.

In the second round, lawmakers had the same number of votes while rank-and-file party members had 47, representing the 47 prefectures of Japan.

Lawmakers in the second round voted 149 to 145 in favor of Takaichi, while party members gave her 36 votes compared with Koizumi’s 11.

Koizumi, 44, the current agriculture minister and the son of former Prime Minister Junichiro Koizumi, would have been Japan’s youngest leader since Hirobumi Ito, who was just a few months younger than Koizumi when he became the country’s first prime minister in 1885.

Arata Yamamoto reported from Tokyo, and Jennifer Jett from Hong Kong.