TOKYO: Japan’s ruling party looks increasingly set to call an early leadership election, according to local media surveys, an outcome that would likely result in the departure of Prime Minister Shigeru Ishiba and heightened uncertainty for investors.
Of 342 Liberal Democratic Party lawmakers and regional representatives eligible to participate in Monday’s (Sept 8) vote on whether to bring forward the leadership race, some 149 are in favor and 48 opposed, according to a poll conducted by the Yomiuri newspaper on Friday (Sept 5).
Separately, a survey from Kyodo on the same day showed 120 lawmakers out of 295 would seek an early race.
The latest polls paint a far bleaker picture for Ishiba’s chances of avoiding an early leadership contest than previous surveys. A poll by the Nikkei newspaper on Thursday showed some 111 lawmakers out of 295 said they would seek an early race. About half of lawmakers did not clarify their position in that survey.
A majority out of the combined 295 lawmakers and 47 LDP regional representatives is required to hold an early leadership vote. Ishiba’s fate will likely hinge on the 40% of lawmakers who remain undecided, Kyodo said.
Should the LDP opt on Monday for an early leadership race, Ishiba would probably step aside given that the staging of a vote two years before his current term expires would already indicate he has lost the support of his party.
For market players, the scenario of an early leadership election would create uncertainty about the policy direction, with the possibility that a new LDP head might try more aggressive economic measures that put further strain on the nation’s finances, while putting pressure on the Bank of Japan to change the pace of its interest rate hikes.
Monday’s vote is a culmination of weeks of back-and-forth within the ruling party as Ishiba insisted on staying on as premier even after a second national election setback that saw the LDP lose control of both chambers of parliament. - Bloomberg
