Why is Japan PM Fumio Kishida stepping down? Who could replace him?

Japan’s Prime Minister, Fumio Kishida, has announced that he will not seek re-election as leader of the ruling Liberal Democratic Party (LDP), signalling the end of his nearly three-year tenure.

Amid plummeting approval ratings, internal party pressure, and ongoing political scandals, Kishida’s decision has opened the door to a leadership race that will determine Japan’s next prime minister.

This decision, which many see as an effort to revitalise the LDP, also raises significant questions about the country’s political future at a time of mounting regional security threats and economic challenges.

What led to Kishida stepping down?

Kishida’s leadership has been under severe strain for months, largely due to his handling of a series of political scandals and the country’s economic woes. The most damaging of these scandals involved allegations of unrecorded kickbacks within the LDP, a situation that has cast a long shadow over his administration.

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Kishida himself acknowledged the toll these controversies had taken on his leadership, stating, “The series of political finance scandals has eroded trust and weighed heavily on my decision.”

The economic landscape has further exacerbated his troubles. Japan has been grappling with rising inflation and a weakening yen, leading to significant public dissatisfaction. The financial markets have reacted with volatility, with the yen strengthening by 0.3 per cent against the dollar following Kishida’s announcement, while the Nikkei index dipped slightly by 0.2 per cent.

The government and the central bank have made concerted efforts to stabilise the situation, but the public’s frustration remains palpable. A recent poll by NHK indicated that Kishida’s approval rating had plummeted to just 25 per cent, a stark contrast to the 54 per cent he enjoyed when he first took office in October 2021.

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Who may replace Kishida as Japanese PM?

As the LDP prepares for its leadership contest in September, several prominent figures have emerged as potential successors to Kishida. Among them, former Japanese Defence Minister Shigeru Ishiba stands out as a top contender, consistently ranking high in media polls.

Ishiba, known for his defence expertise and his long-standing rivalry with former Japanese Prime Minister Shinzo Abe, has been a vocal critic of the current political climate. He has called for greater transparency and accountability in political fundraising, a stance that has resonated with many amid the ongoing scandal.

Another key figure is Taro Kono, the current Digital Transformation Minister and a former foreign and defence minister. Kono is often seen as a reformist, particularly popular outside of Japan’s political centre, Nagatacho.

He narrowly lost to Kishida in the 2021 LDP presidential election and has since maintained a high profile, despite facing criticism for issues related to the My Number national identification system. Kono has pledged to use digital technology to enhance transparency in political finance, positioning himself as a candidate for change.

Toshimitsu Motegi, the LDP Secretary-General and a veteran politician, is also a potential candidate. Although he has been a key supporter of Kishida, Motegi is rumoured to harbour ambitions of his own. He has extensive experience in both foreign and trade policy but is seen as less popular among the general public compared to his rivals.

Motegi’s role in resolving a recent dispute between the LDP and its coalition partner Komeito has kept him in the political spotlight, though it remains to be seen whether he can garner the necessary support within the party.

Sanae Takaichi, the Economic Security Minister, is another contender. A staunch conservative and close ally of Shinzo Abe, Takaichi ran in the 2021 LDP leadership election but was eliminated in the first round.

Her hawkish views on foreign policy and economic security have earned her a dedicated following, although her path to the premiership remains uncertain, given her lack of factional backing within the LDP, reported Tokyo-based news outlet The Japan Times.

Finally, Yoko Kamikawa, the current Foreign Minister, has also been mentioned as a potential successor. Kamikawa, who has served in various high-profile roles, including Justice Minister, has been a key player in Japan’s diplomatic efforts.

However, her relatively low standing in public opinion polls suggests that her candidacy may be a long shot.

What now for Japan’s polity?

Kishida’s departure injects a degree of uncertainty into Japan’s political landscape. His decision to step down comes at a time when the country faces significant challenges both domestically and internationally.

The next LDP leader, and by extension the next prime minister, will have to navigate a complex environment marked by economic instability, geopolitical tensions, and the need for internal party reforms.

Shoki Omori, Chief Desk Strategist at Mizuho Securities, remarked on the market implications of Kishida’s announcement, telling TIME magazine, “The market implication is that Japanese politics is going to be foggy. Market participants are going to dislike the uncertain situation, especially those investing in risk assets, such as equities.”

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This sentiment reflects broader concerns about Japan’s political stability and the potential for a return to the revolving door of prime ministers that has plagued the country in the past.

While no general election is required until 2025, the new LDP leader may choose to call an early election to secure a stronger mandate. However, the LDP’s dominance in the Diet, coupled with its coalition with Komeito, suggests that any election is likely to reaffirm the party’s control of the government.

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With inputs from agencies