Kishida Plans to Step Down in September

Japanese Prime Minister Fumio Kishida is reportedly planning to step down as leader of the ruling Liberal Democratic Party (LDP) in September, marking the end of his three-year tenure.

His time in office has been characterized by rising prices and political scandals, according to Japanese media reports on Wednesday.

Sources, including the national broadcaster NHK, indicated that Kishida, who has seen a significant decline in his popularity, will not seek re-election as the LDP leader.

The party has not officially commented on the reports.

Kishida’s decision to resign is expected to trigger a leadership contest within the LDP, with the winner likely to become the leader of the world’s fourth-largest economy.

His successor will face several challenges, including rising living costs, escalating geopolitical tensions, and the potential return of Donald Trump as U.S. President in the next year.

During his term, Kishida guided Japan through the aftermath of the COVID-19 pandemic, implementing significant stimulus spending.

However, his appointment of Kazuo Ueda as the Governor of the Bank of Japan marked a shift in economic policy. Ueda, an academic, was tasked with ending the monetary stimulus initiated by his predecessor.

In July, the Bank of Japan unexpectedly raised interest rates, causing instability in the stock market and leading to a sharp depreciation of the yen.

Shoki Omori, Chief Strategist at Mizuho Securities in Japan, suggested that if these reports are accurate, the country could see tighter financial conditions depending on the new LDP leader's policies. This could particularly impact high-risk assets, including stocks.