According to the latest report from the Japan Broadcasting Corporation (NHK) on Wednesday (August 14th), Fumio Kishida told party insiders that he plans to give up participating in the upcoming Liberal Democratic Party presidential election in September.

The Japan Broadcasting Corporation reported that this means that after the election of the new president of the Liberal Democratic Party, Fumio Kishida will resign as prime minister.

Kyodo News also reported this news. Tokyo Television reporter Yumei Shimohara said that it is reported that Kishida will hold an emergency press conference at 11:30 am local time on the 14th to announce this decision.

Reuters reported that Japanese Prime Minister Fumio Kishida will step down as the leader of the ruling party in September this year, ending his three-year term. During this period, Fumio Kishida pushed for higher wages and increased defense spending.

Local media such as NHK quoted senior Japanese government officials as saying that amid a series of scandals and political disputes, Fumio Kishida's public support has declined and he will not seek re-election as the president of the Liberal Democratic Party.

For several months, Kishida's approval rating has been declining, and voters have been frustrated with Kishida's handling of the Liberal Democratic Party's political funding scandal, ongoing inflation, and yen depreciation.

It is currently unclear who will succeed Kishida as Prime Minister, but in local media surveys, former Defense Minister Shigeru Ishiba is the most popular choice.

After the news of Fumio Kishida's withdrawal from the election came out, the USD/JPY rose sharply in response.

The USD/JPY has currently fallen to a low of 146.07. Prior to the news, the exchange rate fluctuated around 146.87, and earlier the currency pair had touched 147.18.

Fumio Kishida: Will not run for re-election as leader of the Liberal Democratic Party

Japanese Prime Minister Fumio Kishida stated at a press conference on Wednesday that a new image of the Liberal Democratic Party needs to be presented in the next leadership election, and he will not participate in the LDP leadership election.

Fumio Kishida said, "My withdrawal is the best way to show that the Liberal Democratic Party is changing. I need to resign first

Fumio Kishida stated that he will fully support the new leader.

Fumio Kishida stated that a series of scandals, including the "black gold" incident, have eroded public trust. This decision was made considering the best interests of the public. As the leader of the Liberal Democratic Party, I will not hesitate to take responsibility. My withdrawal from the election has opened a new chapter in the 'black gold' incident. “

Analyst comments

Mark Cranfield, a market strategist, pointed out that after Japanese Prime Minister Takeo Kishida said he would not run for the second term of office of the leader of the ruling Liberal Democratic Party, the yield of Japanese treasury bond bonds rose and the yen strengthened. Whoever becomes a new leader may need to commit to a generous spending plan to attract voters, which will damage Japan's treasury bond and slightly boost the yen. At the same time, the Japan Eastern Stock Exchange index is falling back from its earlier high as investors will search for specific details to understand which industries will benefit the most if the government increases spending.

Jingshun Asset Management Company stated that political uncertainty may suppress the Japanese stock market in the short term, given that Japanese Prime Minister Fumio Kishida has announced that he will not participate in the Liberal Democratic Party elections. Although it is expected that there will not be significant changes in policies, 'if the trend of policies promoting individual investment is disrupted, it will have a negative impact on the stock market'.

Jingshun Asset Management Strategist Tomo Kinoshita said. However, due to the consistently low level of public support for Fumio Kishida's cabinet, people may expect that high-level changes will enhance confidence and improve the ability to implement policies.

Tokyo Broadcasting Corporation reported that currently, Toshimitsu Motegi, former Secretary General of the Liberal Democratic Party, Shigeru Takashi, former Environment Minister Kinjiro Koizumi, Digital Minister Taro Kono, and Minister of Economic Security Hayao Takashi are strong candidates for the position of President of the Liberal Democratic Party. Kishida's withdrawal from the election will greatly affect the election prospects of the Liberal Democratic Party's presidential election, and the competition is expected to become even more intense.

Reuters reported that Fumio Kishida's decision will trigger a race to replace him as the president of the Liberal Democratic Party and become the leader of the world's fourth largest economy.

Fumio Kishida's successor will face rising living costs, escalating geopolitical tensions, and the possibility of Donald Trump being elected as the President of the United States next year.