The political landscape in Japan is witnessing significant upheaval. Japanese Prime Minister Shigeru Ishiba has decided to step down today. Ishiba became Japan's Prime Minister in November 2024, and after just ten months, he has had to resign. The 68-year-old Ishiba has asked his party, the Liberal Democratic Party (LDP), to conduct an emergency leadership election. He has stated that he will continue to work until a new leader is chosen.
According to a report by Reuters, during his brief tenure, he witnessed his coalition lose its majority in elections due to rising inflation and growing public anger. He did not resign even after the defeat in the Upper House elections held in July, despite demands for his resignation. This led to internal strife within the party. Instead, he focused on a trade agreement with the United States regarding President Donald Trump's tariffs, which affected Japan's important automobile industry and impacted economic growth.
In an emotional tone, Shigeru Ishiba stated that with the trade agreement between Japan and the United States and President Trump's directive, a significant hurdle has been overcome. He now wishes to pass the responsibility to the next generation.
Due to political uncertainty, the value of Japan's currency, the yen, has fallen, and government bond sales have increased. Speculation about Ishiba's fate intensified when the LDP decided to conduct a leadership election to choose a new party leader through voting.
Who Will Succeed Shigeru Ishiba?
Koizumi and Takaichi are considered potential successors to Shigeru Ishiba. The race for new leadership could further complicate Japan's economy, already impacted by US tariffs. Markets are keen to see whether a leader like Sanae Takaichi, who supports loose economic policies and criticizes the Bank of Japan's interest rate hikes, will be chosen. Last year, Shigeru Ishiba narrowly defeated Takaichi in the second round of the LDP leadership election. Meanwhile, Shinjiro Koizumi, coming from a political family and formerly serving as Ishiba's agriculture minister, could also take Ishiba's place. He was tasked with controlling rising prices.
LDP's Electoral Defeat Led to Resignation!
Kazutaka Maeda, an economist at the Meiji Yasuda Research Institute in Japan, stated that Ishiba's resignation was necessary following the LDP's successive electoral defeats. He noted that the potential successors are Koizumi and Takaichi. There are not high expectations for major changes from Koizumi, but Takaichi's stance on policy and interest rates may be crucial for financial markets. However, the party does not have a majority in parliament, so it's not guaranteed that the next LDP president will become Prime Minister.
What Do the Experts Say?
Experts suggest that whoever becomes the next leader may call snap elections to gain a mandate. Japan's opposition is weak, but the far-right and immigration-opposing Sanseito Party has recently achieved positive results, introducing its ideas into mainstream politics.
55% Say: No Need for Immediate Elections
In a Kyodo News Agency survey, 55% of people stated that there is no need for immediate elections. Prime Minister Shigeru Ishiba's last task was to complete a trade agreement with America last week. Under this agreement, Japan promised $550 billion in investments in exchange for lower tariffs agreed with US President Donald Trump.
