Japan’s incoming Prime Minister Shigeru Ishiba announced on Monday his intention to hold snap elections on October 27, as markets reacted to a strong yen and concerns over potential tax hikes. Ishiba, who will officially assume office on Tuesday after securing leadership of the ruling Liberal Democratic Party (LDP), supports the Bank of Japan’s policy of raising interest rates and has indicated there may be scope for increasing corporate taxes.
The LDP leadership race was closely contested, with right-wing candidate Sanae Takaichi, a proponent of former Prime Minister Shinzo Abe’s “Abenomics” policies, expected to win. Takaichi’s policies of ultra-low interest rates and tax cuts had previously boosted markets, sending stocks higher and weakening the yen. However, with Ishiba’s victory, the yen surged from 146.50 to around 142 per dollar, causing a market selloff that hit exporters particularly hard. The Nikkei index fell by 4.8%, with companies like Toyota and Mitsui Fudosan seeing significant declines of 7.6% and 8.7%, respectively.
Ishiba confirmed reports about the snap election, stating that it was essential for his government to gain public legitimacy quickly. Known for his interest in defense, Ishiba aims to restore confidence in the LDP following scandals that hurt the party’s reputation under outgoing Prime Minister Fumio Kishida, who faced criticism over rising prices and a party slush fund controversy.
In terms of defense policy, Ishiba plans to strengthen ties with regional allies amid increasing Chinese assertiveness. He advocates for the formation of an “Asian NATO” and calls for stronger responses to Chinese and Russian incursions into Japanese airspace and waters. Reports suggest that Katsunobu Kato, a former chief cabinet secretary, may be appointed as finance minister, while veteran defense minister Gen Nakatani is expected to return to his former role.
Although Ishiba has emphasized improving Japan’s fiscal health—given its massive debt—some experts, such as Taro Saito of NLI Research Institute, have expressed concerns that he may not focus enough on measures to stimulate economic growth. Chief Cabinet Secretary Yoshimasa Hayashi, who is likely to remain in his post, assured that the government would continue to monitor financial markets closely and cooperate with the Bank of Japan to manage the economy and financial policy.
Japan’s incoming Prime Minister Shigeru Ishiba announced on Monday his intention to hold snap elections on October 27, as markets reacted to a strong yen and concerns over potential tax hikes. Ishiba, who will officially assume office on Tuesday after securing leadership of the ruling Liberal Democratic Party (LDP), supports the Bank of Japan’s policy of raising interest rates and has indicated there may be scope for increasing corporate taxes.
The LDP leadership race was closely contested, with right-wing candidate Sanae Takaichi, a proponent of former Prime Minister Shinzo Abe’s “Abenomics” policies, expected to win. Takaichi’s policies of ultra-low interest rates and tax cuts had previously boosted markets, sending stocks higher and weakening the yen. However, with Ishiba’s victory, the yen surged from 146.50 to around 142 per dollar, causing a market selloff that hit exporters particularly hard. The Nikkei index fell by 4.8%, with companies like Toyota and Mitsui Fudosan seeing significant declines of 7.6% and 8.7%, respectively.
Ishiba confirmed reports about the snap election, stating that it was essential for his government to gain public legitimacy quickly. Known for his interest in defense, Ishiba aims to restore confidence in the LDP following scandals that hurt the party’s reputation under outgoing Prime Minister Fumio Kishida, who faced criticism over rising prices and a party slush fund controversy.
In terms of defense policy, Ishiba plans to strengthen ties with regional allies amid increasing Chinese assertiveness. He advocates for the formation of an “Asian NATO” and calls for stronger responses to Chinese and Russian incursions into Japanese airspace and waters. Reports suggest that Katsunobu Kato, a former chief cabinet secretary, may be appointed as finance minister, while veteran defense minister Gen Nakatani is expected to return to his former role.
Although Ishiba has emphasized improving Japan’s fiscal health—given its massive debt—some experts, such as Taro Saito of NLI Research Institute, have expressed concerns that he may not focus enough on measures to stimulate economic growth. Chief Cabinet Secretary Yoshimasa Hayashi, who is likely to remain in his post, assured that the government would continue to monitor financial markets closely and cooperate with the Bank of Japan to manage the economy and financial policy.
Japan’s incoming Prime Minister Shigeru Ishiba announced on Monday his intention to hold snap elections on October 27, as markets reacted to a strong yen and concerns over potential tax hikes. Ishiba, who will officially assume office on Tuesday after securing leadership of the ruling Liberal Democratic Party (LDP), supports the Bank of Japan’s policy of raising interest rates and has indicated there may be scope for increasing corporate taxes.
The LDP leadership race was closely contested, with right-wing candidate Sanae Takaichi, a proponent of former Prime Minister Shinzo Abe’s “Abenomics” policies, expected to win. Takaichi’s policies of ultra-low interest rates and tax cuts had previously boosted markets, sending stocks higher and weakening the yen. However, with Ishiba’s victory, the yen surged from 146.50 to around 142 per dollar, causing a market selloff that hit exporters particularly hard. The Nikkei index fell by 4.8%, with companies like Toyota and Mitsui Fudosan seeing significant declines of 7.6% and 8.7%, respectively.
Ishiba confirmed reports about the snap election, stating that it was essential for his government to gain public legitimacy quickly. Known for his interest in defense, Ishiba aims to restore confidence in the LDP following scandals that hurt the party’s reputation under outgoing Prime Minister Fumio Kishida, who faced criticism over rising prices and a party slush fund controversy.
In terms of defense policy, Ishiba plans to strengthen ties with regional allies amid increasing Chinese assertiveness. He advocates for the formation of an “Asian NATO” and calls for stronger responses to Chinese and Russian incursions into Japanese airspace and waters. Reports suggest that Katsunobu Kato, a former chief cabinet secretary, may be appointed as finance minister, while veteran defense minister Gen Nakatani is expected to return to his former role.
Although Ishiba has emphasized improving Japan’s fiscal health—given its massive debt—some experts, such as Taro Saito of NLI Research Institute, have expressed concerns that he may not focus enough on measures to stimulate economic growth. Chief Cabinet Secretary Yoshimasa Hayashi, who is likely to remain in his post, assured that the government would continue to monitor financial markets closely and cooperate with the Bank of Japan to manage the economy and financial policy.
Japan’s incoming Prime Minister Shigeru Ishiba announced on Monday his intention to hold snap elections on October 27, as markets reacted to a strong yen and concerns over potential tax hikes. Ishiba, who will officially assume office on Tuesday after securing leadership of the ruling Liberal Democratic Party (LDP), supports the Bank of Japan’s policy of raising interest rates and has indicated there may be scope for increasing corporate taxes.
The LDP leadership race was closely contested, with right-wing candidate Sanae Takaichi, a proponent of former Prime Minister Shinzo Abe’s “Abenomics” policies, expected to win. Takaichi’s policies of ultra-low interest rates and tax cuts had previously boosted markets, sending stocks higher and weakening the yen. However, with Ishiba’s victory, the yen surged from 146.50 to around 142 per dollar, causing a market selloff that hit exporters particularly hard. The Nikkei index fell by 4.8%, with companies like Toyota and Mitsui Fudosan seeing significant declines of 7.6% and 8.7%, respectively.
Ishiba confirmed reports about the snap election, stating that it was essential for his government to gain public legitimacy quickly. Known for his interest in defense, Ishiba aims to restore confidence in the LDP following scandals that hurt the party’s reputation under outgoing Prime Minister Fumio Kishida, who faced criticism over rising prices and a party slush fund controversy.
In terms of defense policy, Ishiba plans to strengthen ties with regional allies amid increasing Chinese assertiveness. He advocates for the formation of an “Asian NATO” and calls for stronger responses to Chinese and Russian incursions into Japanese airspace and waters. Reports suggest that Katsunobu Kato, a former chief cabinet secretary, may be appointed as finance minister, while veteran defense minister Gen Nakatani is expected to return to his former role.
Although Ishiba has emphasized improving Japan’s fiscal health—given its massive debt—some experts, such as Taro Saito of NLI Research Institute, have expressed concerns that he may not focus enough on measures to stimulate economic growth. Chief Cabinet Secretary Yoshimasa Hayashi, who is likely to remain in his post, assured that the government would continue to monitor financial markets closely and cooperate with the Bank of Japan to manage the economy and financial policy.
