Tim Kelly and Sakura Murakami
(Reuters) – Japanese Prime Minister Fumio Kishida said on Wednesday he would step down next month, bowing to public discontent over his three-year term marred by political scandals and the soaring cost of living, setting off a fierce battle to choose his successor.
“Politics cannot function without the trust of the people,” Prime Minister Abe told a press conference, announcing his decision not to seek re-election as president of the ruling Liberal Democratic Party.
“I made this difficult decision with the people in mind and a strong will to push forward with political reform.”
The LDP is scheduled to hold elections in September to choose the party’s leader to succeed Prime Minister Abe and ultimately the prime minister position.
Kishida’s approval ratings have fallen since he became president in 2021 following revelations about the LDP’s controversial ties to the Unification Church.
His popularity took a further hit when unrecorded political donations were discovered at an LDP fundraising event.
And while Japan has finally emerged from years of deflationary pressure, it has also faced public discontent as wages have not kept up with rising living costs.
“The incumbent LDP prime minister cannot run for the party presidency unless he is sure of victory,” said Koichi Nakano, a professor of political science at Sophia University.
“It’s like a sumo wrestler’s Yokozuna. You don’t just have to win, you have to win with grace.”
His successor as LDP leader will face the challenges of restoring public trust in the party and tackling the rising cost of living, rising geopolitical tensions with China and the possibility of Donald Trump returning to the U.S. presidency next year.
U.S. President Joe Biden called Kishida’s tenure “truly historic” and praised his new national security strategy, support for Ukraine and steps to usher in a new era of U.S.-Japan-South Korea cooperation.
“Prime Minister Kishida’s courageous leadership will be remembered on both sides of the Pacific for decades to come, and I will always be grateful to call him a friend,” Biden said in a statement.
State Department spokesman Vedant Patel said at a regular press conference that there was no doubt that whoever succeeds Kishida would “continue to deepen our alliance and partnership with Japan.”
Monetary policy and arms buildup
During his term as Japan’s eighth-longest-serving post-war prime minister, Kishida broke with previous economic policy by eschewing trickle-down economics driven by corporate profits and instead focusing on boosting household incomes through measures such as raising wages and encouraging stock ownership.
Prime Minister Abe appointed academic Ueda Kazuo as governor of the Bank of Japan to help pull Japan out of the coronavirus pandemic with a massive economic stimulus package and rescue the country from his predecessor’s radical monetary easing.
In July, with inflation taking hold, the Bank of Japan unexpectedly raised interest rates, destabilizing stock prices and causing the yen to appreciate rapidly.
Omori Yoshiki, chief Japan strategist at Mizuho Securities in Tokyo, said Kishida’s resignation could mean a tightening of fiscal and monetary conditions depending on the candidate.
“The bottom line is that risk assets, especially equities, are likely to be the hardest hit,” he said.
Kishida’s tenure also saw notable changes in the security environment, leading Japan to reassess its traditional pacifist policies.
The prime minister announced Japan’s biggest military buildup since World War II, pledging to double defense spending, aimed at deterring neighboring China from using military force to pursue its territorial ambitions in East Asia.
With Washington’s help, Kishida also repaired tense relations between Japan and South Korea, allowing them and their common ally the United States to further deepen security cooperation to counter the threat of North Korea’s missile and nuclear weapons programs.
“Personally, I would like him to remain prime minister for a little longer,” said Naoya Okamoto (22), a company employee in Tokyo.
“He may have been stressed out (by the low ratings) and given the circumstances surrounding him I think he had no choice but to resign.”
Next Leader
According to NHK, former Defense Minister Shigeru Ishiba has already announced his candidacy to succeed Kishida, saying he would like to “fulfill his duties” if he receives enough support.
Other candidates being mentioned include Foreign Minister Yoko Kamikawa, Digital Minister Taro Kono and former Environment Minister Shinjiro Koizumi.
Experts say the LDP must choose a newcomer who emerges from scandals if it is to survive a general election scheduled for the third quarter of 2025.
Political analyst Ito Atsuo pointed out, “If the LDP ignores public criticism over its political funding scandal and chooses its next president, the party risks suffering a crushing defeat.”
“We need to choose a young person who can shape a new LDP that is unrelated to the current administration.”
(Reporting by Sakura Murakami, Rocky Swift, Tim Kelly, Tetsushi Kajimoto, Akiko Okamoto, Kiyoshi Takenaka and Kevin Buckland; Additional reporting by David Brunnstrom and Daphne Psarredakis in Washington; Editing by Neil Flick, Clarence Fernandez and Jonathan Oatis)
