Fumio Kishida will be Japan’s next prime minister after winning a leadership battle in which the ruling Liberal Democratic Party plays its future on stability instead of gambling. a new generation of leaders.
The victory in a strictly controversial race Wednesday is a wonderful return for the 64-year-old former foreign minister, whose political fortunes have been shattered his defeat against Yoshihide Suga in last year’s LDP leadership battle.
But the victory of Kishida is a blow to a younger generation of party members, who hoped that the leadership contest would involve a generational change and a break from the opaque factional politics that had defined Japanese politics for decades.
The vote on Wednesday dragged on to the second round after there was no one the four contenders managed to gain a majority in the first round.
Kishida received 256 votes out of the 762 ballot papers cast by MPs and members of parliament, while Taro Kono, the Minister of Vaccines, received 255 votes. The early result was a disappointment for Kono, the candidate with the strongest support from the public and the younger generation. He came third in terms of votes from MPs alone.
In the second round, in which MPs dominate the vote, Kishida Kono comfortably beat by gaining 60 per cent of the ballot while senior LDP MPs from powerful factions flocked to his side to ensure continuity and predictability in policy.
With little public support on his part, however, Kishida’s victory was unlikely to alleviate investors’ fears that Japan would return to a chaotic period of fluctuating premiership after nearly eight years of stability under Shinzo Abe.
Japanese shares, which rose to a 30-year high in the days following Suga’s resignation, fell sharply on Wednesday after it became clear that Kishida would be the next prime minister.
Kishida, who is expected to be appointed prime minister on Monday, will not have much time to settle before a general election to be held at the end of November.
During his campaign, Kishida promised to move away from the neoliberal approach of deregulation that his predecessors followed and promised a more equitable distribution of wealth.
But analysts have said it is unlikely he is significant of the Abenomics program of aggressive monetary and fiscal stimulus in the short term as the country dealt with the outbreak of the coronavirus pandemic.
In early September the Suga suddenly announced he would not want to do re-election in the LDP leadership after his popularity declined due to his handling of Covid-19. He served only one year in office.
Since then, vaccination rates have risen and new cases of Covid -19 have dropped, forcing the government to lift the state of emergency for the first time since April in all areas of Japan.
On foreign policy, Kishida is expected to continue Japan’s close security alliance with the US, while increasing its defense capabilities and spending to counter a more confident China.
Traders said that while the focus of domestic investors would now shift to issues such as the reopening of the economy and stimulus measures, foreign investors, who own about a third of the Japanese market and represent 60 percent of daily volumes, were probably the favorite more internationalist Kono.
“The market does not like the result – foreigners like English-speaking people a lot,” Nicholas Smith, CLSA’s strategist, referred to Kono.
Both the Topix and Nikkei benchmarks traded lower on Wednesday, but plunged in the last 30 minutes of the trade to close 2.1% and 2.2% lower, respectively.