Japan’s Prime Minister Kishida to Resign, paving way for new leader

Japan’s Prime Minister Fumio Kishida announced on Wednesday that he will step down next month, citing public discontent over political scandals and rising living costs that have overshadowed his three-year tenure.
“Politics cannot function without public trust,” Kishida stated at a press conference, explaining his decision not to seek re-election as leader of the ruling Liberal Democratic Party (LDP). He expressed his commitment to advancing political reform despite his resignation.
The LDP is set to hold a leadership contest in September to elect a new party president, who will also become the next prime minister. Kishida’s approval ratings fell after he assumed office in 2021, particularly due to controversies involving the LDP’s connections with the Unification Church and revelations about unrecorded political donations. His popularity also suffered as wages lagged behind rising living costs, amid Japan’s transition from years of deflation.
Koichi Nakano, a political science professor at Sophia University, noted that an incumbent LDP prime minister must secure a victory to remain competitive in the presidential race. “It’s like the grand champion yokozunas of sumo. You don’t just win, but you need to win with grace.”
Kishida’s successor will need to rebuild public trust, address escalating living costs, manage geopolitical tensions with China, and consider the impact of a potential return of Donald Trump as U.S. president. Kishida, Japan’s eighth-longest-serving post-war leader, moved away from profit-driven economic policies to focus on boosting household income, including wage increases and promoting share ownership.
During his tenure, Kishida led Japan through the COVID pandemic with substantial stimulus spending and appointed Kazuo Ueda as the new head of the Bank of Japan. However, the recent unexpected interest rate hike by the BOJ amid inflation has contributed to stock market volatility and a stronger yen.
Shoki Omori, chief Japan desk strategist at Mizuho Securities, indicated that Kishida’s departure could result in tighter fiscal and monetary conditions, potentially affecting risk-assets like equities.
Kishida also spearheaded Japan’s most significant military expansion since World War II, aiming to counter China’s growing influence and improve security cooperation with South Korea and the U.S. against North Korean threats.
Naoya Okamoto, a 22-year-old office worker in Tokyo, expressed regret over Kishida’s departure: “Maybe he was stressed with the low ratings, and with all the circumstances around him, I guess he has no choice but to step down.”