
Japan’s ruling Liberal Democratic Party is poised to elect its new leader on Saturday, in a vote that is also likely to determine who will become Japan’s next prime minister.
The new leader will face the task of trying to reunite the ruling party, regain public support and reengage with a younger generation of voters who are flocking to smaller populist parties amid a cost-of-living crunch and an influx of foreigners.
Given the once-dominant party’s loss of its majorities in both chambers of the legislature, the new chief will also need to reach out to some of the opposition parties to pass legislation and budgets.
Five contenders will compete for over 590 ballots in the first round of voting. The race is expected to spill over into a run-off between the two candidates who secure the most votes in the initial round.
Political scion Shinjiro Koizumi is leading in most polls of LDP supporters, with right-leaning Sanae Takaichi, who is more popular among the general public, ahead in some. Continuity candidate Yoshimasa Hayashi has generally polled in third place, but has been gaining ground.
The first round is open to the party’s 916,000 rank-and-file party members, giving them 295 votes to match those of the LDP’s lawmakers in parliament. But the run-off will give more weight to the lawmakers, allowing them to again cast one ballot each, while allocating just one vote to each of the 47 regional branches of the party.
While Koizumi and Takaichi are still seen as the most likely contenders to win, among surveys of lawmakers, Koizumi has the lead, with Hayashi in second, ahead of Takaichi. Both Takaichi and Koizumi were the favorites last year, too, but Shigeru Ishiba took advantage of the political space between them to pull off a surprise.
Still, Hayashi needs a big pickup in regional support to make it through to the second round.
The winner will face a parliamentary vote later this month to become premier, a contest expected to go to the LDP chief. A victory by Koizumi would mean Japan is set to get its youngest prime minister since the end of World War II, while a triumph by Takaichi would herald the first time the nation is led by a woman.
Whoever wins is likely to face a key diplomatic test less than a month into the job. President Donald Trump is expected to pass through Asia in the coming weeks and could meet the new Japanese leader in Japan or on the sidelines of multilateral meetings in the region depending on schedules and attendance.
Japan has largely wrapped up its trade deal with the United States and has secured the lowering of auto tariffs to 15%. But the implementation of a $550 billion investment fund in the US could still cause issues, while Washington’s demands on defense spending by its allies may also become a talking point.
On the domestic front, Koizumi has toned down his previous reformist pledges, such as overhauling Japan’s labor laws, and stuck to more subdued and centrist policy proposals so far.
He has said he’ll ensure wages go up ¥1 million by 2030 and that he’ll link the rise in tax-free income allowances with inflation. He’ll scrap gasoline taxes and revise the income tax as rising costs weigh on households. He’ll also look to create an action plan on dealing with issues related to foreign-born people by year-end.
Takaichi is known to be fiscally expansionist and politically right-wing. Known to be a protege of the late prime minister Shinzo Abe, she also cites former UK Prime Minister Margaret Thatcher as an inspiration.
Her pro-stimulus stance may have the biggest impact on markets among the candidates.
She says she will ensure her active fiscal policy is “responsible” as she looks to boost growth. She has also called for monetary policy to stay easy, saying that the Bank of Japan shouldn’t raise borrowing costs, Kyodo News reported Thursday, citing a survey. Those views may help weaken the yen and boost stocks while pushing up super-long government debt yields.
In a move that would likely anger China, Takaichi has also said she hopes to continue visiting Yasukuni shrine in Tokyo. The shrine is seen as symbolizing Japan’s past militarism. Koizumi has also visited Yasukuni multiple times.
Hayashi is most closely aligned to the current administration as the government’s top spokesman. He has served in multiple high-profile positions in previous administrations, including as foreign minister and defense minister. He has pledged to ensure wages rise more than inflation and floated the idea of introducing a UK-inspired universal credit system.
The runoff vote result is expected after 3 p.m. local time, and the winner may hold a press conference later in the day.
This article was generated from an automated news agency feed without modifications to text.