Ishiba Steps Down: Who Will Rise to Meet Japan’s Challenges?

首相官邸ホームページ, CC BY 4.0 <https://creativecommons.org/licenses/by/4.0>, via Wikimedia Commons

On Sunday, September 7, 2025, Japanese Prime Minister Shigeru Ishiba announced his intention to resign as both Liberal Democratic Party (LDP) president and Prime Minister, ending his tenure after less than a year in office. This decision came just one day before a scheduled LDP vote that would have likely forced him from power following devastating electoral defeats in both houses of parliament. Ishiba has stated that he will continue his duties until a new successor has been found, with the LDP’s emergency leadership vote being slated for Saturday, October 4.

The resignation triggers immediate political uncertainty in the world's fourth-largest economy, with significant implications for both geopolitical and domestic policy direction and financial markets.

Key Statistics:

• Cabinet approval rating: 32.7% (down 2.7 percentage points from previous month)

• Ishiba’s tenure length: Less than 11 months (October 2024 - September 2025)

• Recent US-Japan trade deal: $550 billion investment commitment

• LDP lost majorities in both Diet houses under Ishiba’s leadership

Current Political Situation

The resignation announcement comes at a critical point, strategically timed after completing negotiations on a crucial US trade deal that reduced President Donald Trump’s punitive tariffs on Japanese automotive exports from 27.5% to 15%. Speaking with apparent emotion, Ishiba stated, “Now is the time for me to resign as the negotiations on US tariffs have come to an end, and I decided to pass the baton to the next person.”

While Trump may have been a “little surprised” at Ishiba’s resignation, this announcement was somewhat anticipated. Internal LDP opposition had been mounting since July’s devastating upper house election loss, with party members scheduled to vote on September 8 on whether to hold an extraordinary leadership election. Facing certain defeat in this internal vote, Ishiba chose to resign preemptively to “avoid opening up a decisive split in the LDP.” The electoral context driving this crisis began with the October 2024 lower house elections, where the LDP-Komeito coalition lost its majority for the first time in 12 years. This was followed by an even more damaging defeat in July 2025’s upper house elections, leaving the ruling coalition without majorities in either chamber of the Diet.

What Happened?

Ishiba became LDP president and Prime Minister in October 2024 on his fifth attempt at party leadership, narrowly defeating conservative candidate Sanae Takaichi in a runoff election. The 68-year-old former defense minister had campaigned as a party outsider promising to tackle rising living costs and restore public trust following a major LDP funding scandal. However, his leadership was immediately challenged by economic headwinds and voter discontent. Inflation, particularly the doubling of rice prices over the past year, became politically damaging and his public support further eroded due to policy missteps and controversies, including criticism of his decision to appoint only two women to his cabinet and allegations of expensive gift-giving to party members.

Ishiba’s government faced other simultaneous crises. Domestically, rising living costs and stagnant wages fueled voter anger. Internationally, Trump’s aggressive tariff policies forced Japan to downgrade its already weak growth outlook, while regional security tensions escalated with an unprecedented gathering of Chinese, Russian, and North Korean leaders in Beijing for a massive military parade just earlier this month. These challenges were compounded by the emergence of the far-right Sanseito party, which made significant gains in recent elections by exploiting public anxiety over immigration and foreign worker policies, bringing once-fringe anti-immigrant rhetoric into mainstream political discourse.

The Horserace is Afoot: Meet Your Jockeys

Three main candidates have been discussed as major contenders for the president of the LDP:

1. Sanae Takaichi (Age 64)

Policy Positions: Takaichi represents the conservative wing of the LDP, advocating for constitutional revision to remove pacifist constraints, regular visits to the controversial Yasukuni shrine, and significantly, expansionary fiscal policy combined with opposition to Bank of Japan interest rate hikes. She has called for “strategic fiscal spending” to boost Japan’s fragile economy.

Political Prospects: Having lost to Ishiba in last year’s runoff election, Takaichi has maintained strong support among conservative factions and would become Japan’s first female Prime Minister if elected. Her fiscal dove stance contrasts sharply with traditional LDP fiscal conservatism, potentially appealing to voters struggling with living costs. While she may be liked by the conservative wing of the LDP, she, at the moment, lacks the cross-over support of the moderate side of the party that would make her candidacy a shoo-in.

2. Shinjiro Koizumi (Age 44)

Policy Positions: The Columbia University-educated Koizumi represents a reformist agenda within the LDP, focusing on generational change and policy innovation. As Agriculture Minister under Ishiba, he led highly publicized efforts to address soaring rice prices, gaining him public popularity. His environmental focus and nuclear policy positions (previously calling for reactor phase-outs) distinguish him from traditional LDP positions.

Political Prospects: The son of former Prime Minister Junichiro Koizumi, he would become Japan’s youngest Prime Minister since the Meiji Era. His loyalty to Ishiba during the recent crisis, combined with his telegenic appeal and political dynasty credentials, positions him as a strong contender for voters simultaneously seeking change and stability. He has backing from former Prime Minister Suga, and his ties to Ishin no Kai co-leader Yoshimura might allow him to find the appropriate dance partner in a new coalition government.

3. Yoshimasa Hayashi (Age 64)

Policy Positions: Currently serving as Chief Cabinet Secretary, Hayashi represents institutional continuity and has consistently advocated for respecting Bank of Japan independence on monetary policy. His extensive cabinet experience across defense, foreign affairs, and agriculture portfolios positions him as a steady-hand candidate.

Political Prospects: Despite his experience and international credentials (Harvard Kennedy School graduate, former US Congressional staffer), Hayashi lacks a strong factional base within the LDP, limiting his leadership prospects in a party system still dominated by the remnants of factional politics.

4. Others

As of September 9, Toshimitsu Motegi, former foreign and economy minister, who placed 6th during the 2024 party president election and is likely to be the oldest candidate at age 69, threw his hat into the ring. Takayuki Kobayashi, a 50-year-old former bureaucrat turned economic security minister in the Kishida cabinet, has also been bandied about as a potential candidate as well.

What’s Next?

Leadership Selection Timeline

The LDP is expected to hold its leadership election on October 4, 2025, and will enter into a ‘full spectrum’ leadership race that incorporates due-paying members and LDP politicians (a la the 2024 election that saw Ishiba come into power). While the loss of parliamentary majorities creates unprecedented possibilities for opposition influence or even leadership, the LDP remains the largest single party and thus it is expected that the winner of the LDP leadership contest will also take up post as the premier.

The new party president will then face a Diet vote to become Prime Minister. While the LDP’s position as the party with the most seats makes the success of the new party leader likely despite the loss of outright majority, some political jockeying must be undertaken to secure votes from opposition parties.

A Long-term Look

After a new leader is selected, they may call snap elections to seek a fresh mandate, particularly if they represent a significant policy departure from Ishiba’s approach. However, recent public polling showing 55% of respondents opposing early elections suggests public preference for political stability over continued electoral uncertainty.

Ishiba’s resignation represents a broader challenge to Japan’s political establishment, with traditional governing patterns disrupted by voter dissatisfaction and the rise of populist alternatives. The LDP’s ability to restore public confidence while maintaining policy effectiveness will determine whether this transition represents a temporary disruption or signals deeper structural changes in Japanese politics. The ultimate test will be whether the new leadership can address the fundamental and existential economic and social challenges that drove voter dissatisfaction with Ishiba’s government, while maintaining Japan’s critical international relationships and regional security commitments in an increasingly complex geopolitical environment.

With the vote about a month out, any twist in this politically and economically uncertain moment could redefine the race and ripple far beyond Japan's shores.

This analysis reflects the political situation as of Tuesday, September 9, 2025.

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