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2h ago

LDP Votes Saturday to Pick Japan’s Next Leader as Takaichi, Koizumi Face Likely Runoff

Markets await clarity on the winner’s fiscal direction.

Japan's former internal affairs minister Sanae Takaichi delivers a speech at the kick-off of the campaign for the LDP presidential election in Tokyo, Japan, September 22, 2025. Franck Robichon/Pool via REUTERS
Image
Agriculture Minister Shinjiro Koizumi, from left, and Former Economic Security Minister Sanae Takaichi before the Liberal Democratic Party (LDP) Presidential Election Candidate Debate at Nihon Kisha Club in Tokyo, Japan, on Sept. 24, 2025.
Former Economic Security Minister Sanae Takaichi speaks during the Liberal Democratic Party (LDP) Presidential Election Candidate Debate at Japan National Press Club in Tokyo, Japan, on Sept. 24, 2025. Jia Haocheng/Pool via REUTERS

Overview

  • Party members and 295 lawmakers will cast 590 votes, with surveys showing Shinjiro Koizumi leading among lawmakers and Sanae Takaichi ahead with grassroots members, making a same-day runoff likely.
  • The Liberal Democratic Party has lost working majorities in both chambers, pushing all candidates to rule out an immediate snap election and to signal openness to broader cooperation or coalition talks.
  • Takaichi promotes state-backed "crisis management" investment in sectors such as AI, semiconductors and defense, while Koizumi emphasizes household relief and tax trims and Yoshimasa Hayashi offers a steadier, continuity approach.
  • Investors are braced for moves in long-term JGBs, the yen and equities, with analysts saying a Takaichi victory could steepen the yield curve and weaken the currency, whereas a Koizumi or Hayashi win is seen as less disruptive.
  • The new leader is expected to host President Donald Trump in Tokyo in late October, with trade and investment ties likely to feature early in the premiership.