Japanese Prime Minister Fumio Kishida announced on Wednesday that he would step down after the ruling Liberal Democratic Party (LDP) elects a new leader next month, taking ‘responsibility’ for a months-long political funding scandal.
The party leader serves as prime minister when the party has a parliamentary majority. Speaking at a surprise press conference, Kishida said he would not stand for re-election as party leader in a vote scheduled for next month.
“It is necessary to show the public the new, changed LDP,” Kishida told the press conference, adding: “The first and most obvious step to show that the party is changing is for me to step aside”.
Kishida said the political funding scandal was the deciding factor.
“I have no hesitation in taking responsibility for the problems caused by members of my party. Now that there is a short gap in my diplomatic programme, I would like to make a clean break by resigning and proceed with the leadership vote,” the Japanese prime minister told reporters on Wednesday.
The prime minister’s comments put an end to weeks of speculation about whether he would run for the LDP leadership again, amid growing concern within the party that the current government may not be able to win the next lower house election in October next year.
Kishida has been struggling for months with record-low approval ratings for his cabinet and the LDP’s losses in local elections, fuelled by public frustration over the way the party raises and manages money for political purposes.
The Kishida-led LDP has been rocked since December last year by revelations of its ties to the scandal-plagued Unification Church and a scandal over the use of political funds by party factions, which have shaken public confidence in politics.
According to a Nikkei poll, the cabinet’s approval rating hovered around 20 percent for eight consecutive months until July, down from 60 percent when Kishida took office in late 2021.
Kishida declined to comment on who he would support in the upcoming LDP leadership race, but said: “I hope [my successor] will have a reform mindset and not return to old ways. We must continue to reform political financing and restore public trust in politics”.
In June, Kishida oversaw the passage of an updated political funds law aimed at curbing lawmakers’ use of party funds. Opposition lawmakers argued that the new law lacked teeth.
“No matter who the party leader is, the nature of the LDP has never changed,” Kenta Izumi, leader of the Constitutional Democratic Party, the largest opposition group in Japan’s parliament, told reporters on Wednesday, adding: ‘The public should not fall for this trick.
In his statement, Kishida underlined his efforts to revive Japan’s economy with his flagship ‘new capitalism’ policy after decades of deflation, weak inflation and slow growth. “During my three years as prime minister and party leader, I ended the deflationary economy and revived the ‘animal spirits’ of raising wages and promoting investment,” he said.
His unexpected statement had no immediate impact on Japanese financial markets. The Nikkei average fell slightly before Wednesday’s morning close when Kishida said he would step down, but the index ended the day up 0.58%. The yen briefly hit a one-week high, trading at 146.07 against the dollar before midday.
At the press conference, Kishida also highlighted his diplomatic achievements, such as hosting the G7 summit last year and strengthening security ties with the US and South Korea.
Following Kishida’s statement, US Ambassador to Japan Rahm Emanuel X praised the prime minister’s ‘decisive leadership’ in a statement.
“Prime Minister Kishida has helped build a network of security alliances and partnerships in the Indo-Pacific region that will stand the test of time,” Emanuel said.
Among those expected to succeed Kishida are former party secretary general Shigeru Ishiba, current economic security minister Sanae Takaichi, digital minister Taro Kono and former environment minister Shinjiro Koizumi.
Ishiba was the most popular choice among respondents in a Nikkei poll at the end of July, followed by Koizumi, the son of former prime minister Junichiro Koizumi.
The LDP leadership election is scheduled for 20-29 September, with the date to be announced on 20 August.
