When Japanese Prime Minister Fumio Kishida steps down next month, he will leave Japan with a tightened alliance with the United States and warmer ties with South Korea. But his domestic legacy is far shakier, with a worried public angry about his handling of the economy and unanswered questions about how to fund promised spending to bolster the military and revive a flagging birth rate.
When ruling Liberal Democratic Party (LDP) faction leaders, including former premiers, opted three years ago to back Kishida over his more popular rival as their next leader and hence prime minister, they were betting his experience and consensus-building style would outweigh a lackluster public image.
Kishida, now 67, did lead the party to a strong showing in an October 2021 general election and keep his coalition’s grip on the Japanese parliament’s upper house the next year. But a spate of party scandals and public dismay over rising prices fueled by a weak yen then sent his support ratings tumbling alongside those of the LDP.
On Wednesday, the mild-mannered former foreign minister admitted that his time had run out. Pressured by party lawmakers worried about their prospects in a lower house election that must be held by the end of October 2025, Kishida announced he would not run in a party leadership election next month. The winner of the vote is assured the premiership by virtue of the LDP-led coalition’s grip on parliament.
“In this presidential election, it is necessary to show the people that the LDP is changing and the party is a new LDP,” Kishida said at a press conference where he announced his decision.
But Kishida’s resignation also marks a return to the rapid churn that characterized Japanese leadership before the era of former Prime Minister Shinzo Abe. Kishida is already Japan’s second prime minister since Abe resigned in 2020 after a historic, nearly eight-year term as the country’s longest-serving premier. Abe remained influential until he was shot to death while campaigning in July 2022. Kishida’s predecessor, Yoshihide Suga, bowed out after just one year in the face of cratering support due to his handling of the COVID-19 pandemic.
The rapid turnover of Japanese premiers followed reforms in the 1990s that boosted the role of the prime minister and party label in elections, making lawmakers more reliant on their leader’s popularity. Abe, in his lengthy second term, and his predecessor Junichiro Koizumi (premier from 2001 to 2006) were the exceptions that proved the rule.
Kishida was a core member of Abe’s cabinet as foreign minister, but he took office promising to craft a “new capitalism” that would distribute national wealth more equitably and promote growth as an alternative to his former boss’s trademark “Abenomics” recipe of fiscal spending, hyper-easy monetary policy, and structural reform.
Critics say Kishida’s new capitalism never really took off. “There were changes at the edges, but if you look at it, it was just more fiscal spending and, until recently, appointing someone to the Bank of Japan [governorship] who was committed to keeping rates lower for longer,” said Jesper Koll, an economist and global ambassador for Monex Group, an investment advisory firm.
Those policies had implications beyond Japan’s shores. Bank of Japan Governor Kazuo Ueda jolted global markets last month when the central bank raised interest rates to a 15-year high and signaled its readiness to hike borrowing costs further on growing prospects that inflation would durably hit its 2 percent target.
Kishida also jawboned companies into the biggest wage hike in three decades—5.1 percent for big corporations—but the raises failed to keep pace with inflation due largely to the weak yen. “There was no feel-good factor because of cost-push inflation,” Koll said.
Even as ordinary Japanese struggled with higher prices, they were treated to a widening scandal in the LDP in which dozens of party lawmakers transferred profits from fundraising events to unreported slush funds. That followed on the heels of public outrage over the party’s links to the controversial Unification Church, considered a cult by critics, including Abe’s assassin. Both scandals involved largely members of the LDP faction previously headed by Abe, on whose backing Kishida had relied to win a second-round runoff in the party leadership race in 2021.
The LDP—and Kishida himself—came under heavy criticism for failing to take responsibility for the funding scandal; efforts to restore public trust by sanctioning some lawmakers and revising a political funds control law were perceived as falling far short of needed steps.
“Kishida wanted to do more, but the LDP said ‘no, we’ll engineer an empty gesture,’ and the public saw through that,” said Jeff Kingston, director of Asian Studies at Temple University’s Japan campus.
Kishida’s efforts to tighten security ties with the United States, mend fences with South Korea—long frayed by feuds over the wartime past—and boost defense spending while loosening limits on arms exports won him plaudits from Washington. In December 2022, Tokyo set a new target for military spending over the next five years: 43 trillion yen, or 1.5 times the then-current level. But details on funding, including future tax hikes, remain vague. The same is true for Kishida’s pledge to double spending on childcare by the early 2030s to raise Japan’s sinking birth rate.
Public expectations that higher taxes are indeed on the horizon won the bespectacled Kishida the moniker “four-eyed tax-hiker” from critics online last year, even as he promised a one-off income tax cut of 40,000 yen per person. The tax cut took effect in June but did nothing to stem the decline in Kishida’s approval rating, which hit 25 percent this month.
After a string of losses in local elections, the writing was on the wall for Kishida. He failed to win backing from party heavyweights, ties with whom had frayed over his handling of the slush fund scandal.
The new party leader will be chosen in a vote by party members next month, on a date yet to be set. But whether LDP popularity with the general public will prevail remains to be seen. The main opposition party still lags behind the LDP and has yet to work out how to cooperate with other opposition groups, potentially reducing pressure on the LDP to pick the most popular leader.
The dissolution, at least in name, of most LDP factions in response to the funding scandal, potentially reducing their role in dispersing campaign funds and key posts, makes predictions especially tough. Factional support has been key to victory in past party leadership polls.
Former Defense Minister Shigeru Ishiba, 67, a frequent critic of the party mainstream who has run for the party presidency four times in the past, tops the list in media surveys of preferred candidates but is less popular with lawmakers. Next is telegenic former Environment Minister Shinjiro Koizumi, 43, often followed by Digital Minister Taro Kono, 61, who lost out to Kishida last time.
Other potential candidates include LDP Secretary-General Toshimitsu Motegi, 68, who ranks low in popularity polls but has experience in several cabinet posts. Among possible female challengers are the hawkish Economic Security Minister Sanae Takaichi, 63, and low-profile Foreign Minister Yoko Kamikawa, 71. Former Economic Security Minister Takayuki Kobayashi, 49, has been floated by lawmakers keen for a fresh face.
Whether a new leader will revive the LDP’s tattered fortunes seems likely to depend on who wins, and how, as well as the main opposition party’s struggle to convince the public it can govern. “If it’s a brokered election and they pick a veteran who thinks they’re entitled, a bounce would be short-lived,” Koll said, adding that a generational change could boost support and spark a snap election.
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