Tokyo, September 7, 2025 — Japanese Prime Minister Shigeru Ishiba has announced his intention to resign, aiming to stave off a potential split within the ruling Liberal Democratic Party (LDP), according to reports from both NHK and sources close to the premier.
Ishiba’s resignation comes amid mounting political pressure following consecutive election defeats in both parliamentary chambers. Voter anger over rising living costs and dissatisfaction with the government’s stewardship drove the LDP to lose its majority in key July elections, casting doubt upon Ishiba’s leadership.
Despite resisting internal calls for his resignation earlier, Ishiba remained focused on securing a U.S. trade agreement designed to shield Japan’s critical automotive sector from tariffs. The agreement, reportedly finalized last week, involves US$550 billion in Japanese investments in exchange for reduced U.S. auto tariffs—a move seen as his final act before stepping down.
Markets reacted swiftly to the growing political uncertainty. The Japanese yen weakened, and government bond yields surged, with the 30-year yield reaching historic highs.
With an extraordinary leadership vote scheduled by the LDP, potential successors are drawing attention. Conservative lawmaker Sanae Takaichi, favored for her looser fiscal stance, and Shinjiro Koizumi, the farm minister widely respected for his moderate policies, are emerging as leading contenders.
