Top Choice for Japan's Next Prime Minister
A recent survey by Reuters revealed that Shigeru Ishiba, a former defense minister and secretary-general of the ruling Liberal Democratic Party (LDP), is the top choice among corporate leaders to replace Prime Minister Fumio Kishida. This puts him ahead of Sanae Takaichi, who aspires to become Japan's first female prime minister.
The LDP is set to hold a leadership election on September 27th, with the winner becoming the next prime minister due to the party's control of parliament. Kishida has announced he will not be running for re-election.
The new leader will face several critical challenges, including leading the LDP to victory in a potential early lower house election and navigating the complex relationship with the United States amidst China's growing economic and military influence.
The survey results show that 24% of respondents favor Ishiba, compared to 22% for Takaichi and 16% for Shinjiro Koizumi, the son of former Prime Minister Junichiro Koizumi. While Ishiba generally enjoys higher public approval ratings, Koizumi tends to perform better among LDP supporters.
Ishiba's extensive experience includes serving as defense minister, LDP policy chief, and holding cabinet portfolios for agriculture and reviving local economies. The 67-year-old former banker has prioritized achieving a clear exit from deflation and encouraging investments in growth areas by both the public and private sectors.
Takaichi, 63, advocates for strategic fiscal spending in cutting-edge technologies to drive economic growth. Koizumi, who would be Japan's youngest-ever leader if elected, plans to largely continue Kishida's economic policies.
Kishida focused on boosting household income by encouraging businesses to raise wages and laid the groundwork for the Bank of Japan to phase out its radical monetary stimulus by appointing Kazuo Ueda as the bank's governor.
The survey also highlighted the business community's priorities for the next prime minister, with rising prices and fiscal reforms topping the list. Japan currently faces the industrial world's heaviest debt burden, exceeding twice the size of its economy.
The survey, conducted by Nikkei Research on behalf of Reuters, reached out to 506 companies, with 245 responding. It also explored views on monetary policy, with nearly two-thirds of respondents welcoming the BOJ's July rate hike. However, opinions on the timing of further rate increases were divided, with 20% favoring December 2024, 27% choosing the first quarter of 2025, and 21% opposing any further hikes.
Concerns were also raised about the potential impact of rate hikes on fundraising and wages, with 29% of respondents citing a 0.5% rate as a threshold for such effects.