Tokyo, Sept. 8 (Reuters) – A ruling Japanese MP has prepared a bid to replace Prime Minister Isba, who will be resigning on Monday as financial markets reacted to political uncertainty and the possibility that his successor would increase government spending.
Isba called time in a short term on Sunday, saying he was responsible for hurting the elections that saw his ruling coalition lose a majority in both chambers of Congress amid rage over rising costs of living.
He directed the Liberal Democrats, who have ruled Japan for much of postwar history, to hold an emergency leadership election. The party is scheduled to vote on October 4th, an LDP official close to the issue told Reuters.
Japan’s yen sinking and ultra-long-term bonds will win record highs after Isba’s resignation sparks speculation that potential successor-backed policies (such as the fiscal pigeon Takada) could burden the world’s most beneficial advanced economies.
“LDP is facing the worst crisis since its establishment,” former foreign minister Toshimitsu Motegi, 69, told reporters on Monday.
“We must tackle serious challenges both domestically and internationally and quickly unite to advance our nation.”
A source close to the government’s top spokesman also told Reuters that Yoshimasa, the director general of Yoshimasa, who also intends to take the election.
However, the frontrunner is the son of Prime Minister Ono, the son of LDP veteran Takama and Prime Minister Ono Jinjiri Island, and has become well-known for the mission of Isba’s Agriculture Minister trying to curb the rise in rice prices.
For both, victory marks a milestone in Japan. Takae, 64, became the first female leader and 44-year-old Kojima, becoming the youngest in modern times.
Neither officially announced their candidacy, but they finished second and third in the final leadership contest in September 2024.
“All the indication is that it comes down to them facing each other,” said Jeffrey Hall, lecturer at Japanese Studies at Kanda International Studies.
Conservative candidates
Most important to investors and Japan’s diplomatic relations is Takashima, who has many posts, including the Minister of Economic Security and the Home Affairs.
She stands out in her opposition to the Bank of Japan’s interest rate hikes and her call for increased spending to boost the fragile economy.
Investors are betting that political suspension alone will delay BOJ’s plan to tighten monetary policy.
Money market is currently priced at about 20% of the BOJ hiking rate by the end of October, down from 46% a week ago.
Kochi’s anticipated leadership bids of nationalism will also be closely monitored by Japan’s powerful neighbour China.
Known for his conservative positions such as the revision of the pacifist constitution, Takashi is a regular visitor to the Yaskuni Temple to honor the deaths of Japan, which Beijing and others consider to be symbols of militarism in the past.
Earlier this year, Taiwan, the democratic island that China advocated, proposed that Taiwan, Japan and other partners could form a “quasi-security alliance.”
“China may take a more hostile attitude towards Japan, because she describes herself as a very hawk about China,” said Hall of Kanda University.
(Reporting by Kaori Kaneko, Rocky Swift, Kantaro komiya, Yoshifumi takemoto, and Tom Bateman, Written by John Geddie, Edited by Chang-Ran Kim, Stephen Coates, and Ros Russell)
