Photo: Reuters Japanese Prime
Minister Fumio Kishida will step down as ruling party leader in September,
media reported on Wednesday, ending a three-year term marked by rising prices
and marred by political scandals.
Kishida, who saw his
public support erode, will not seek re-election in the Liberal Democratic Party
(LDP) leader, Japanese media including public broadcaster NHK reported citing
senior administration staff.
Kishida's decision to
quit will trigger a contest to replace him as party boss, and by extension as
the leader of the world's fourth-biggest economy.
The successor the LDP
chooses could face increases in living costs, escalating geopolitical tensions,
and the potential return of Donald Trump as U.S. president next year.
As the country's
eighth-longest serving post-war leader, Kishida led Japan out of the COVID
pandemic with massive stimulus spending, but later appointed Kazuo Ueda, an
academic tasked with ending his predecessor’s radical monetary stimulus, to
head the Bank of Japan (BOJ).
The BOJ in July unexpectedly
raised interest rates, contributing to stock market instability and sending the
yen sharply lower.
If the "reporting
is accurate, we should expect tighter policy or neutral but slightly tighter
fiscal, monetary conditions depending on the candidate", said Shoki Omori,
chief Japan desk strategist, Mizuho Securities, Tokyo.
"In short,
risk-assets, particularly equities, will likely be hit the most," he
added.
In another break from
the past, Kishida also eschewed corporate profit-driven trickle-down economics
in favour of policies aimed at boosting household incomes, including wage hikes
and promoting share ownership.
