Japan's next PM needs to have economic plan, deal with tariff impact, says analyst

Japan's next prime minister will need to have a plan for the economy and deal with the impact of U.S. tariffs, a political analyst said on Monday (September 8).

AI Brief

Ishiba resigned after election losses, prompting the LDP to begin its leadership race with no guarantee the winner becomes PM.
Frontrunners Takaichi and Koizumi could make history as Japan's first female or youngest prime minister.
The next leader must address rising prices and trade tensions, especially tariffs from the US under President Trump.

The race to become the next president of Japan's ruling Liberal Democratic Party (LDP) - and by extension the country's likely next Prime Minister - began in earnest on Monday, following outgoing leader Shigeru Ishiba's resignation on Sunday (September 7).

Despite the party's almost unbroken grip on Japan's post-World War Two politics, the next LDP president is no longer guaranteed to become premier as recent elections saw the ruling coalition lose its majorities in both houses of parliament.

Jeffrey Hall, an expert in Japanese politics from Kanda University of International Studies, attributed the LDP's election slip to Ishiba.

"As Prime Minister, you're supposed to be the face of the party. You're supposed to sell the party's message to voters. And Ishiba did not do a very good job of selling the party's message to voters at all... and voters punished the LDP two elections in a row because they just weren't satisfied with the way he was running the country", said Hall.

The frontrunners in the race to replace Ishiba are LDP veteran Sanae Takaichi and Shinjiro Koizumi, a political scion and son of former Prime Minister Junichiro Koizumi, who gained prominence as Ishiba's agriculture minister tasked with trying to rein in soaring rice prices.

Both would mark milestones for Japan. Takaichi, 64, becoming its first female leader and Koizumi, 44, its youngest in the modern era.

Hall said it would be unprecedented for a person in their 40s to be running the world's fourth-largest economy, but Koizumi's fluency in English may help the country's diplomatic standing and negotiations.

Any leadership bid by the nationalistic Takaichi would also be closely watched by Japan's powerful neighbour China. Known for conservative positions such as revising the pacifist postwar constitution, Takaichi is a regular visitor to the Yasukuni shrine to honour Japan's war dead, viewed in China and South Korea as a symbol of past militarism.

Neither Takaichi or Koizumi has formally announced their candidacy but they finished second and third respectively in the last leadership contest in September 2024.

No matter who wins the LDP leadership, Japan's next Prime Minister will need to tackle an economy beset by rising prices and the impact of U.S. President Donald Trump's trade tariffs.

"Even though Japan did get an agreement that secured tariffs at a lower rate than Trump had initially threatened, the 15 percent tariffs on Japanese goods are still going to hurt Japan's economy and this will contribute to the sense of economic pessimism in the country and people feeling like things are getting worse," Hall said.