Japan's incoming PM Shigeru Ishiba plans to call snap polls by Oct 27 as market plummets after his win: Report

After getting elected as the ruling Liberal Democratic Party’s head, Japan’s incoming Prime Minister Shigeru Ishiba is reportedly planning to call for snap general elections by late October. The 67-year-old veteran conservative leader is scheduled to take oath as Japan’s Prime Minister on October 1.

Following the oath-taking ceremony, Ishiba plans to dissolve the Parliament by October 9. According to NHK News and other Japanese national dailies, Ishiba is planning to call for elections by October 27. The reports emerged after Ishiba said on Friday that he wants to call an election in the country to shore up his mandate “as soon as possible”. However, he did not confirm publically the date for the upcoming polls.

Earlier this week, the former Japanese Defence Minister replaced outgoing PM Fumio Kishida as the leader of the LDP. Ishiba was chosen after an intense race among a record nine candidates. LDP which has been governing Japan uninterrupted for decades, is facing a major decline in popularity after senior leaders of the party were marred by the slush fund scandal and a plethora of other controversies.

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Japan’s market takes a hit with Ishiba’s victory

Meanwhile, Japan’s stock market plunged on Monday, due to Ishiba’s surprise victory over Sanae Takaichi, who was leading in polls, ahead of the party voting. The 225-issue Nikkei stock average tumbled as much as 4.7 per cent in early trading after Ishiba’s win.

The Nikkei underperformed the Topix by more than one percentage point, The Japan Times reported. “There’s no surprise in today’s fall given how much the market had rallied in the last several sessions on hopes that Takaichi would win,” Kohei Onishi, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told the Japanese news outlet.

“This will be a temporary move. Investors have been buying Japanese stocks in the hope of inflation, wage hikes and market reforms, not on BOJ easing. The market will go back to focus on fundamentals,” he added.

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Amid a market shake-up, Kyodo News is reporting that Katsunobu Kato is set to become the next finance minister, a move that is seen to ease worries that Ishiba may radically scale back some of former Prime Minister Shinzo Abe’s reflationary policy, which was also prolonged by Kishida.

With inputs from agencies.