Overview

• Ishiba said he would step down to avert a party split after back-to-back election losses that left the LDP-led coalition without majorities in both Diet chambers, raising the risk of policy gridlock.
• He instructed the party to organize an emergency leadership election and said he will stay on until a successor is chosen, adding that Monday’s planned decision on an early race was no longer necessary.
• He linked the timing to progress on U.S. tariff talks, after President Donald Trump signed an order implementing a deal that sets many Japanese tariffs at about 15%, with reports of large Japanese investment commitments.
• Potential successors discussed by party figures and media include Agriculture Minister Shinjiro Koizumi, former minister Sanae Takaichi, and Chief Cabinet Secretary Yoshimasa Hayashi.
• Investors are watching for instability, with the yen weakening and long-dated Japanese government bond yields rising on political uncertainty.