Here’s Who May Replace Japan’s Ishiba As Prime Minister

Japan’s ruling Liberal Democratic Party is close to deciding on a new leader following Prime Minister Shigeru Ishiba’s resignation after humiliating election results.

Five candidates, including reformist Shinjiro Koizumi, conservative Sanae Takaichi, and cabinet veteran Yoshimasa Hayashi, will face off in a party leadership vote on Saturday after a two-week campaign. 

The LDP is looking to freshen up its leadership after losing control of both houses of parliament in two dismal national elections under Ishiba’s watch. The results showed voters opting for smaller opposition parties, including the Democratic Party for the People and relatively new right-wing party Sanseito, out of frustration with the LDP’s inflation countermeasures, perceived party corruption and an influx of foreigners into Japan. 

All five ran in last year’s leadership race and have since adopted more centrist positions, avoiding sweeping reforms or bold proposals. With no majority in either chamber, the new LDP leader will likely need to build closer ties with opposition parties to pass budgets and legislation smoothly.

The latest polls show Koizumi and Takaichi as the frontrunners, with Hayashi closing the gap and gaining support among lawmakers in parliament.

Here’s a look at the potential contenders to replace Ishiba.

Koizumi, 44, is looking to become the nation’s youngest postwar prime minister. He is the son of one of Japan’s most famous reformist premiers, and is also portraying himself as a reformer. He has been the face of the LDP’s efforts to lower rice prices — a high-profile initiative with huge cultural and political ramifications. Koizumi placed third in the first round of last year’s leadership vote, behind Takaichi and Ishiba. Koizumi would represent a generational change at the helm of the party, a move that might resonate with swing voters who view the party’s old guard as out of touch. In the meantime, Koizumi has since secured backing from veteran lawmakers, including Finance Minister Katsunobu Kato, to strengthen his support base among right-wingers who may be wary of his more liberal leanings. 

• Economy: Aims to boost average wages by ¥1 million ($6,770) by fiscal 2030

  • To immediately compile fresh economic steps with an extra budget to counter inflation

  • To cut gasoline tax and overhaul income taxes

  • To use rising tax revenue in the wake of inflation to spur growth while paying attention to fiscal discipline

• Monetary: Essentially up to the Bank of Japan, but important for the government and the central bank to share a common direction toward price stability

• Agriculture: To create a safety net enabling rice farmers to boost output without concerns

• Foreigners: To strengthen government coordination over foreigner-related issues such as unauthorized stays and real estate purchases

The 64-year-old Takaichi cites former UK Prime Minister Margaret Thatcher as a key inspiration and is widely seen as the ideological heir to the late Prime Minister Shinzo Abe. Like Thatcher, she is looking to become her nation’s first female premier and would likely steer Japan toward greater conservatism. She narrowly lost to Ishiba in last year’s LDP runoff, despite winning the most votes among rank-and-file members. On economic and finance policy, Takaichi is the most likely to buffet markets due to her pro-stimulus views on goosing economic growth, though she appears to have toned down her rhetoric a notch from last year as she tries to broaden her appeal within the LDP.

Key policies:

• Economy: Plans tax benefits and cash payouts for households

  • “Responsible” active fiscal policy to support the economy

  • Calls on the Finance Ministry to present a “master plan” for economic growth

  • Cites bond issuance as an option for funding inflation relief measures.

  • Wants to raise threshold for untaxed income, possibly before the end of the year

• Monetary: BOJ should hold interest rates for the time being, she told Kyodo News this week

• Foreigners: Plans stricter controls on foreigners in Japan, including tougher measures against unauthorized residents and tighter regulations on land purchases.

Chief Cabinet Secretary Hayashi is one of Ishiba’s closest aides and the nearest to a continuity candidate for the LDP. A Hayashi victory might reassure markets, but would offer little in the way of major change. The ruling party has frequently relied on Hayashi for damage control to replace short-lived ministers, giving him the image of a safe pair of hands. He’s often seen as closer to China than other party heavyweights. Hayashi studied at Harvard University and spent most of the Kishida administration as foreign minister. 

Key policies:

• Economy: Will aim for sustainable 1% growth in real wages

  • Plans UK-inspired universal credit system to support low-income households

  • Too early to consider cutting consumption tax given size of social security spending

• Monetary: Leave it up to BOJ to decide on policy

• Defense: Will strengthen alliance with the US, and enhance Japan’s defense capabilities. Will leverage diplomatic and defense expertise in dealing with US President Donald Trump’s administration.

• Energy: Will promote the restart of nuclear power plants.

Young and conservative, Kobayashi is making his second bid to lead the country. Kobayashi says he will offer more support to the middle classes and people of working age. His key policy pledges range from a temporary tax cut to the strengthening of national defense. A former economic security minister, Kobayashi has recently been reaching out to Taiwan, and speaking about the importance of building supply chains that don’t rely on China. Kobayashi began his career in the Finance Ministry, and is a Harvard Kennedy School graduate. For the right-wing of the party he would provide a younger alternative to Takaichi that would feel less like Abenomics 2.0. 

Key policies: 

• Economy: Calls for a limited-time income tax cut while overhauling regulations on the tax to help working-age people

• Defense: Vows to increase spending further

• Monetary: Says policy is the exclusive responsibility of the BOJ

• Foreigners: Vows to tighten regulations on land acquisitions by foreigners and strengthen border control policies

Motegi is a 69-year-old LDP heavyweight who brings extensive experience as foreign minister, trade minister and party secretary-general, but may lack the broad public appeal of some rivals. Motegi portrays himself as a tough negotiator who can effectively handle relations with the US, based on his previous experience of dealing with Trump during the US president’s first stint. 

Key policies:

• Economy: Pledges “trillions of yen in regional grants” funded by surplus tax receipts to support households struggling with inflation

  • Looks to strengthen a positive cycle of investment and growth

  • Plans to make depreciation expenses fully deductable in first year of capital investment

• Monetary: BOJ should normalize policy as Japan nears definitive end of deflation

• Coalition: Plans to find extra partner among opposition parties that can agree on basic policies. Partners for talks may include Japan Innovation Party (Ishin) and Democratic Party for the People