Japanese Prime Minister Fumio Kishida announced his decision to step down in September, ending a term marked by political scandals and economic challenges. His decision not to seek re-election as the Liberal Democratic Party leader sets off a contest for his replacement. Kishida’s support declined due to revelations about ties to the controversial Unification Church and unrecorded political donations.
His successor will need to address rising living costs, geopolitical tensions with China, and the potential return of Donald Trump as U.S. president. Kishida led Japan out of the COVID pandemic with stimulus spending but faced criticism for appointing a central bank governor who raised interest rates, impacting the economy.
Kishida focused on policies to boost household incomes rather than corporate profits. His departure could lead to tighter fiscal and monetary conditions depending on the new leader. Analysts predict that risk assets, especially equities, may be affected the most by the leadership change.
Overall, Kishida’s tenure saw efforts to address economic challenges and implement policies to benefit households. His successor will face the ongoing impact of the pandemic, economic uncertainties, and global political tensions.
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