Japanese Prime Minister Kishida to resign in September media reports by Reuters

TOKYO (Reuters) – Japanese Prime Minister Fumio Kishida will step down as ruling party leader in September, media reported on Wednesday, ending a three-year term marked by rising prices and marred by political scandals.

Kishida, who has seen his public support erode, will not seek re-election as leader of the Liberal Democratic Party (LDP), Japanese media, including public broadcaster NHK, told senior administration staff.

An LDP spokesman declined to comment.

Kishida’s decision to step down will set off a contest to replace him as party chief and, by extension, leader of the world’s fourth-largest economy.

The LDP’s chosen successor could face rising costs of living, escalating geopolitical tensions and the potential return of Donald Trump as US president next year.

As the country’s eighth post-war leader, Kishida pulled Japan out of the COVID pandemic with massive stimulus spending, but later appointed Kazuo Ueda, an academic tasked with ending his predecessor’s radical monetary stimulus, to head the Bank of Japan (BOJ ). ).

In July, the BOJ unexpectedly raised interest rates, adding to stock market volatility and sending the yen sharply lower.

If “the reporting is correct, we should expect tighter policy or neutral but slightly tighter fiscal and monetary conditions depending on the candidate,” said Shoki Omori, chief Japan desk strategist at Mizuho Securities. Tokyo.

“In short, risk assets, especially equities, are likely to be the most affected,” he added.

In another break from the past, Kishida has also eschewed profit-driven corporate economies in favor of policies aimed at raising household incomes, including raising wages and promoting stock ownership.