Economic Policies Likely to Remain Stuck Due to Ishiba's Exit
Japan finds itself at a crossroads as the Liberal Democratic Party (LDP) prepares for the election of a new leader to replace Shigeru Ishiba. This change will mark the beginning of a new administration, aiming to address the current economic issues and implement the drawn-up economic measures.
The decision by Prime Minister Shigeru Ishiba to step down has created a political vacuum within the LDP, leading to confusion and uncertainty. The coalition, which had been in power, lost control of the House of Representatives in last October's general election and the House of Councillors in the July 20 election, resulting in a loss of majority in both chambers of the Diet, effectively marking the end of the LDP's rule.
The upcoming economic measures, intended to mitigate the impact of high U.S. tariffs, are likely to be delayed substantially due to Ishiba's resignation. This delay could potentially stall important policies, leaving the economy vulnerable to higher prices at home in Japan.
The election of the new LDP leader, who will become the successor to Shigeru Ishiba, is scheduled for October 4, 2025. The field of candidates includes Sanae Takaichi, Toshimitsu Motegi, Yoshimasa Hayashi, and possibly Shinjiro Koizumi.
Political watchers predict it will be difficult to advance important policies before a new administration is launched. The stalling of these policies is expected to occur before the election of the new LDP leader. Ishiba, however, showed his eagerness to hold policy talks with opposition parties on Friday.
The coalition's loss of majority in the upper chamber could potentially stall important policies further. The government plans to draw up economic measures this autumn, but their successful implementation will depend on the new administration that will take charge following the LDP leadership election.
Ishiba announced his decision to step down at a press conference on Sunday, expressing his desire to focus on policy work rather than party politics. This decision has undoubtedly set the stage for a significant shift in Japan's political landscape.
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