TOKYO, Sept 7 – Japanese Prime Minister Shigeru Ishiba announced his resignation on Sunday, bringing to an end a tenure that lasted less than a year but was marked by mounting political challenges and voter frustration over rising living costs. The decision comes shortly after Japan concluded a major trade deal with the United States, a pact Ishiba said he wanted to finalize before stepping aside. At 68 years old, the veteran politician acknowledged that his party’s repeated defeats in parliamentary elections had made his position untenable, adding that it was time to hand leadership to a new generation.
Ishiba told reporters he would continue to perform his duties until a successor is chosen through an emergency leadership race within the ruling Liberal Democratic Party (LDP). The LDP, which has dominated Japanese politics for nearly the entire post-war era, now faces internal upheaval as it works to stabilize its leadership and prepare for the political challenges ahead.
Political Losses and Economic Pressures
Since taking office last September, Ishiba presided over a government that saw its coalition lose control of both chambers of parliament. Much of the discontent stemmed from economic hardships, particularly the rising cost of living that squeezed households across Japan. While the trade pact with Washington reduced some of the tariff burdens imposed on Japanese industries, voters remained deeply concerned about stagnant wages, high prices, and slow economic growth.
Ishiba admitted the party’s July defeat in the upper house election had fueled calls for his resignation. The loss, which further weakened the LDP’s already fragile parliamentary position, convinced many within the party that change at the top was unavoidable. By announcing his departure after securing the U.S. trade agreement, Ishiba framed his resignation as both an act of accountability and a deliberate transition point.
Financial markets quickly reflected the uncertainty created by the political shift. The yen and government bonds experienced pressure, with yields on long-term securities reaching record highs. Investors are now weighing how Japan’s next leader may handle economic policy, particularly monetary tightening by the Bank of Japan and the broader debate over fiscal expansion.
Among the leading contenders to succeed Ishiba is Sanae Takaichi, a long-serving LDP figure known for advocating looser fiscal and monetary policies. She has been critical of recent interest rate hikes and is viewed as a candidate who could favor government spending to stimulate growth. Another prominent possibility is Shinjiro Koizumi, the high-profile farm minister and son of former Prime Minister Junichiro Koizumi. Koizumi has gained attention for efforts to address soaring food prices and carries strong public appeal, although he is considered less likely to enact significant policy shifts.
Voter Anger Over Rising Costs
Analysts note that whoever takes over from Ishiba faces an uphill task. The LDP’s recent electoral setbacks mean the next leader cannot automatically assume control of government unless they can secure a new mandate. While the party remains the largest force in the lower house, speculation is growing that a snap general election could be called to solidify authority. However, opinion polls suggest many Japanese citizens are not eager for another national vote so soon, with a majority indicating preference for political stability before heading back to the polls.
The resignation also comes at a delicate time for Japan’s foreign relations and security environment. Just days earlier, Beijing hosted a major military parade attended by leaders from China, Russia, and North Korea, a rare show of unity among Japan’s regional rivals. Ishiba acknowledged this backdrop, warning that his successor would inherit an increasingly uncertain international landscape alongside domestic economic strains.
During his short tenure, Ishiba secured a $550 billion investment pledge as part of the U.S. trade agreement in exchange for lower tariffs, particularly in the automotive sector. That deal was seen as critical for safeguarding Japan’s manufacturing industry, but it also underscored the heavy toll previous tariffs had taken on growth forecasts. Ishiba emphasized his hope that the next administration would build upon this agreement, push forward with wage growth, and ease public frustration over cost-of-living pressures.
Business leaders have already voiced concern about the political vacuum created by the resignation. Yoshinobu Tsutsui, head of Keidanren, Japan’s most influential business lobby, stressed that “there is no time to lose” in forming a stable government capable of addressing economic challenges and maintaining international credibility.
Public opinion also reflects a mixture of worry and cautious optimism. Citizens interviewed in Tokyo expressed the desire for a leader capable of navigating both domestic hardships and the complicated diplomatic climate. “Given the current uncertainty over tariffs, I just hope the next leader will be capable of managing trade matters wisely and handling diplomacy in a stronger way,” said 48-year-old researcher Maki Utsuno.
As Ishiba prepares to step down, the contest to replace him is expected to shape not only the direction of the LDP but also the broader trajectory of Japan’s economy and foreign policy. Whether through Takaichi’s fiscal expansion, Koizumi’s pragmatic approach, or another candidate altogether, the choice will determine how Japan responds to both immediate financial turbulence and long-term structural challenges.
For Ishiba, who won the LDP leadership only on his fifth attempt and entered office as something of an outsider, the resignation marks a bittersweet conclusion. His brief time in power will likely be remembered for securing a vital trade deal, but also for the inability to overcome domestic discontent and electoral backlash. In stepping aside, he has opened the door for a new chapter in Japanese politics at a moment when both stability and decisive leadership are in high demand.