On August 14 2024, Japanese Prime Minister Fumio Kishida announced that he would resign from the leadership of the Liberal Democratic Party (LDP) in September, stating that he would not run for re-election and would put an end to months of speculation regarding the rising cost of living.[i] Regarding this matter, Kishida made the following statement:
“Japan continues to face difficult situations both domestically and internationally. It is extremely important that we address these issues decisively. The first and clearest step to show that the LDP is changing is for me to resign.”
During his three-year tenure as prime minister, Kishida faced internal political crises, particularly losing significant public support due to a political funding scandal in 2023 that led to the dismissal of four of his ministers. With only 14% of voters backing him in the polls, Kishida may have decided to resign in an attempt to preserve the LDP’s electoral support.[ii] The reasons for Kishida remaining in office until now are attributed to the weakness of the opposition and the lack of strong leadership profiles within the LDP.
With this decision, Kishida aimed to restore public confidence in politics, the party, and democracy. His successor is expected to have a reformist character, bring renewal to the party, and offer a different perspective and solutions to both internal and external crises. Meanwhile, as the country’s economy struggles with decades-long deflation and low growth figures, the recent volatility in the stock markets has caused Japan’s geopolitical risks to rise rapidly.
In recent years, Japan has attracted the attention of Western investors seeking alternatives to China. However, in the meantime, the series of political crises in the country has increased these risks. Japan, which has been adopting a stronger military stance in the Asia-Pacific and deepening security cooperation with the U.S. against China, faces significant challenges in both domestic and foreign policy. Therefore, it remains uncertain whether the leadership change in the LDP will be sufficient to maintain the party’s position in power. Additionally, current policies are not expected to change significantly under the next prime minister. Even more concerning is that Kishida’s sudden and unexpected resignation could lead to the emergence of low-profile candidates within the party who would not normally be expected to run for leadership. This could make it difficult for the LDP to regain or even maintain its public support.
Among the most likely candidates to take over the leadership of the LDP and the position of prime minister in the September elections are former Minister of Economy, Trade, and Industry Toshimitsu Motegi, former Defense Minister Shigeru Ishiba, former Foreign Minister Taro Kono, former Environment Minister Shinjiro Koizumi, former Minister of Economic Security Sanae Takaichi, and the current Foreign Minister Yoko Kamikawa.[iii]
The new leader of the LDP will lead the party until the general elections scheduled for October 2025. Therefore, it is crucial how resilient the new Prime Minister will be in facing domestic and regional crises. In this context, Japan’s new leader may find it challenging to manage intensified relations with the US, South Korea, and other Western allies, as well as keep up with the foreign policy agenda. Moreover, if Donald Trump becomes President of the US, the new Japanese Prime Minister is expected to face significant pressure in managing relations with China. The main challenges the new Prime Minister might face in both domestic and foreign policy could include:
Economic Growth: Japan, which has been struggling with low economic growth and deflation for many years, will require the LDP to implement new reforms to stimulate economic growth and increase productivity. Additionally, trade tensions between the US and China will continue to impact Japan’s economic relations and exports.
Domestic Political Crises: Domestic politics, especially government crises, increasing resignations due to opposition and public pressure, make it challenging for Japan to develop long-term and stable policies.
Security and Defense: Japan may face challenges in dealing with escalating regional geopolitical risks, such as China’s continuously evolving military-technological capabilities, the potential for renewed tensions over the Kuril/Northern Islands with Russia, and North Korea’s nuclear weapons program. If the new Prime Minister aims to increase the defense budget to 2% under pressure from the US, public debates are likely to intensify. Therefore, the greatest challenge will probably be to manage the security alliance with the US and the recently established military cooperation with South Korea in a stable manner.
Regional Relations: As Japan’s diplomatic traffic with its neighbors in the Asia-Pacific region intensifies, the new Prime Minister may struggle to advance the proactive diplomacy of his predecessor Kishida across the broad geography extending from Southeast Asia to the Pacific. Historical disputes on the Korean Peninsula and China-Japan relations, in particular, may take top priority in the new Prime Minister’s foreign policy agenda.
In conclusion Japanese Prime Minister Fumio Kishida has been forced to announce his resignation due to declining popularity and financial scandals that have shaken the party over the past year. The failure of the economic management model may also be a contributing factor. Despite strong financial reforms and measures, Japan failed to correct its 0.7% decline in industrial production in the first quarter of 2024. Additionally, the national currency, the yen, experienced a sharp depreciation of 10.14% against the euro and the dollar throughout 2023, making it one of the most affected currencies.[iv] Conversely, Kishida can be said to have presented an image of a “strengthened Japan” on the international stage. He has taken successful steps to resolve historical disputes with South Korea from World War II and has strengthened regional security posture in collaboration with the United States. Therefore, it remains a low probability that the new leader of the LDP and the incoming Prime Minister will be able to advance Kishida’s policies.
[i] “Japan’s prime minister Fumio Kishida to step down”, FT, https://www.ft.com/content/d849f91c-e0ea-457f-886a-8ae6e1c5ce17, (Date of Access: 14.08.2024).
[ii] Ibid.
[iii] “Potential candidates to be next Japanese prime minister”, Reuters, https://www.reuters.com/world/japan/potential-candidates-be-next-japanese-prime-minister-2024-08-14/, (Date of Access: 14.08.2024).
[iv] “Kishida can’t take the pressure and announces his resignation”, Atalayar, https://www.atalayar.com/en/opinion/pedro-gonzalez/kishida-cant-take-the-pressure-and-announces-his-resignation/20240814112113204095.html, (Date of Access: 14.08.2024).
