- Japan’s incoming PM considers snap election amid stock market decline
- Ishiba has expressed support for the Bank of Japan’s plans to raise interest rates
- The general election is expected on October 27
Japan’s incoming PM considers snap election amid stock market decline
Japan’s new Prime Minister, Ishiba, is considering a snap election as he prepares for his formal appointment on Tuesday. Ishiba has expressed support for the Bank of Japan’s plans to raise interest rates and suggested there is “room” for increasing corporate taxes.
The leadership race within the ruling Liberal Democratic Party (LDP), which has dominated Japanese politics for decades, reached a dramatic conclusion on Friday. Right-wing candidate Sanae Takaichi was initially favoured to win, buoying markets with her endorsement of former Prime Minister Shinzo Abe’s controversial “Abenomics” policies, which include ultra-low interest rates and tax cuts. However, Ishiba’s unexpected victory, marking his fifth attempt, shifted market sentiment significantly.
‘General election expected October 27’
Following Ishiba’s win, the yen strengthened to approximately 142 per dollar, up from around 146.50. In response, investors reacted by selling off stocks, particularly impacting exporters. By early afternoon, the Nikkei index plummeted by five per cent, with major companies like Toyota down 7.9%, Tokyo Electron falling 7.3%, and Mitsui Fudosan declining 8.3%.
Ishiba is reportedly finalising plans to dissolve parliament on October 9, with general elections expected on October 27. LDP leaders are optimistic that Ishiba, who has a keen interest in defence and model building, can help restore the party’s popularity, which has waned under outgoing Prime Minister Fumio Kishida due to a scandal involving party funds and rising inflation concerns.
