Japanese media reported on Sunday that Prime Minister Shigeru Ishiba has decided to resign from his post, amid growing calls within his party for a change in leadership following an electoral setback that left his coalition without a majority in both houses of parliament.
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The public broadcaster NHK said Ishiba made his decision to avoid a party split, while the Asahi Shimbun reported that he could not withstand the mounting calls for his resignation.
Lawmakers of the ruling party in Japan were scheduled to vote tomorrow on the possibility of holding an extraordinary election. Concerns over political uncertainty triggered a sell-off in the yen and Japanese government bonds this week, with the yield on 30-year bonds reaching a record high last Wednesday.
While the political paralysis surrounding such a vote could further strain an economy already weakened by U.S. tariffs, markets are more focused on the possibility that Ishiba could be replaced by someone favoring more flexible fiscal and monetary policies—such as Sanae Takaichi, who has criticized the Bank of Japan’s interest rate hikes. Ishiba had earlier rejected calls from within his Liberal Democratic Party (LDP) to step down and take responsibility for the party’s loss in the House of Councillors elections in July.
However, remaining in power has become increasingly difficult. After losing the majority in both chambers of parliament, his coalition now needs opposition support to pass legislation. According to party rules, at least half of LDP members must request an election, which could take place this month or in October. This would likely delay the parliament’s approval of a supplementary budget aimed at easing the economic burden on households caused by rising living costs.
--(Agencies)
