Prime Minister Fumio Kishida held a press conference at the Prime Minister’s Office on the morning of the 14th, revealing that he will not run in the September Liberal Democratic Party (LDP) presidential election. With Kishida’s decision not to run, movements for “post-Kishida” candidates within the LDP are expected to accelerate.
Kishida stated, “The first step in showing that the LDP is changing is for me to step back,” and added, “I will not run in the upcoming presidential election. I will be committed to supporting a new leader as a foot soldier.” He explained that the decision to not run comes at this moment after stabilizing the immediate diplomatic agenda, amid the public’s growing distrust in politics due to issues related to the former Unification Church and political funding.
This will be the first presidential election since the five factions, excluding the Aso faction, decided to dissolve. Majority maneuvers are likely to become more complicated. Next year, a House of Councillors election is scheduled for summer, followed by the expiration of terms in the House of Representatives in October. The new president is expected to serve as the “face of the election” and restore the party’s fortunes.
Prime Minister Fumio Kishida at the press conference (August 14)
Photographer: Philip Fong/AFP/Bloomberg
In the presidential election, key figures such as Secretary-General Toshimitsu Motegi, former Secretary-General Shigeru Ishiba, Digital Minister Taro Kono, and Minister for Economic Security Sanae Takaichi have shown their intentions to run. Names of other potential candidates include Foreign Minister Yoko Kamikawa, former Environment Minister Shinjiro Koizumi, and former Minister for Economic Security Takabune Kobayashi, who has been elected four times. According to Kyodo News, potential dates for the presidential election voting are emerging as September 20 and 27.
At the press conference, Kishida refrained from commenting on next presidential candidates but pointed out that he hopes the person will not cause a regression in the series of reform mindsets. He expressed, “I want to create a dream team with all of the LDP, and I would like them to work diligently towards restoring this trust.”
Kishida won the presidential election in September 2021, defeating candidates such as Kono. His tenure as Prime Minister has exceeded two years and ten months, but in the latter half, he has been occupied with issues concerning the relationship between the former Unification Church and LDP lawmakers, as well as political funding law violations due to factions. Support for his cabinet has languished, with the LDP suffering a total defeat in the three House of Representatives by-elections in April, and candidates supported by the party also failing in elections such as the Shizuoka gubernatorial election. The Tokyo Metropolitan Assembly by-election in July, amid growing criticism of the Prime Minister, also ended with two wins and six losses.
On the other hand, a plan was decided to increase defense spending over five years starting in fiscal year 2023 to 43 trillion yen, which is 1.5 times the conventional amount. The major G7 summit was held in Hiroshima. Domestically, he promoted “new capitalism,” encouraged corporate wage increases, and made the small investment tax exemption system (NISA) permanent. He has also worked on child-rearing support measures, such as abolishing income limits for child allowances. Kazuo Ueda was appointed as the Governor of the Bank of Japan, and the Bank of Japan made its first interest rate hike in 17 years during its March decision-making meeting.
Kishida expressed his desire to connect his resignation to “advancing policies while gaining the sympathy of the public,” reiterating the need for new leadership to promote policy advancement.
Market reacts with falling stocks and a stronger yen
Immediately after reports of Kishida’s decision not to run in the presidential election by Kyodo News, the stock market saw the Nikkei average temporarily rise by more than 450 yen, but it later showed signs of a decline.
Tomoo Kinoshita, Global Market Strategist at Invesco Asset Management, suggested that the reason for the rise in stock prices could be related to the low level of cabinet approval ratings; as a new face emerges at the top, there may be heightened expectations for increased trust in politics and improved policy execution capabilities.
He noted, “What kind of policy changes occur will be the key,” adding that “the risk of a discontinuous change from previous policies is being recognized, and such uncertainty could weigh on the stock market in the short term.”
In the Tokyo foreign exchange market, the yen’s exchange rate saw a strengthening due to concerns about political uncertainty, coming close to 146 yen per dollar.
Hiroshi Suzuki, Chief Foreign Exchange Strategist at Sumitomo Mitsui Banking Corporation, pointed out that Kishida’s decision not to run has led to a strengthening of the yen due to uncertainties about a change in Prime Minister. However, he noted there are also uncertainties about who the next LDP president will be, stating that “the yen’s strengthening reaction may not last long.”
Cabinet approval ratings remain low
Progress of the Kishida administration
2021
October: Victory in the House of Representatives election
2022
February: Russia begins its invasion of Ukraine
July: Former Prime Minister Shinzo Abe is shot and killed
House of Councillors election
December: Decision to increase defense spending over five years to a total of 43 trillion yen, 1.5 times the conventional amount
2023
March: South Korean President Yoon visits Japan and agrees to restart shuttle diplomacy
Visits Ukraine
April: Kazuo Ueda is appointed as the Governor of the Bank of Japan
Explosive devices are thrown at a speech venue in Wakayama City
May: Major G7 summit held in Hiroshima
August: Begins ocean release of treated water from Fukushima Daiichi Nuclear Power Plant
October: Requests to dissolve the Family Federation for World Peace and Unification (former Unification Church)
2024: January: Permanent implementation of the small investment tax exemption system (NISA)
Noto Peninsula earthquake
Three lawmakers charged in connection with the LDP faction’s slush fund incident
April: State visit to the U.S. with a congressional address
Defeated in all three House of Representatives by-elections, including an uncontested loss
June: Revised Child and Child-Rearing Support Law enacted, expands child allowance
Starts fixed-rate tax cuts such as income tax
(Additional remarks from Prime Minister Kishida’s press conference will be uploaded))