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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
It is hard not to see in Fumio Kishida’s decision against running for another term as Japan’s prime minister a reflection of Joe Biden’s withdrawal from the US presidential election. Both men were struggling to win over public opinion, hindering their party’s electoral prospects and limiting their ability to govern. Japan being a country where stoic attention to duty counts for a lot, Kishida went quietly and of his own volition.
He leaves behind a modest political legacy. On economics, despite his rhetoric, Kishida offered more continuity than change from the policies of his predecessor-but-one, Shinzo Abe. Fiscal and monetary policy were loose. Japan imported inflation from the rest of the world, at the cost of an extremely weak yen that weighed on living standards.
Internationally, unburdened by Abe’s strident nationalism, Kishida was able to improve relations in the neighbourhood, helped by a conservative premier in Seoul and a Beijing leadership with bigger things to worry about. On defence, Kishida shifted Japan further away from pacifism and towards active military co-operation with the US; he raised defence spending to 1.6 per cent of the economy, a meaningful shift, although his successor will have to find the resources to sustain it.
The biggest change under Kishida was in Japanese politics itself. His term was marred by a convoluted and drawn-out scandal over political funding, which ultimately led to the disbanding of almost all the old-school factions within his ruling Liberal Democratic party, the downfall of several senior politicians, and a widespread disgust among the Japanese public with business as usual. The consequence is an unusually open election to succeed Kishida as LDP leader and therefore as prime minister.
In other circumstances, that might prompt a battle of ideas, but Japan’s challenges — its large public debt, its elderly population and its unfriendly neighbourhood — mean there is little scope for dramatic departures on policy. Now that inflation is on target and interest rates are rising, the next prime minister will need to restore fiscal discipline, but not so quickly as to crush the economy. They will need to sustain the US alliance, possibly with a recalcitrant Donald Trump back in the White House. Politically, they will need to fight and win a general election, which must be held by October 2025 at the latest.
Most of all, Japan’s leader needs to project hope, optimism and confidence in the face of these great challenges. Junichiro Koizumi and Abe, the last two Japanese prime ministers who endured, found a way to do this. Kishida never quite managed it. In order to give the next prime minister the best possible chance, it is vital to make the leadership election an extensive public audition, and not a stitch-up behind the scenes. In the wake of the funding scandal, Japan needs better than a weak leader beholden to party elders.
There are a large number of credible candidates, including former Abe protégés such as Toshimitsu Motegi and Katsunobu Kato; experienced ministers with an independent streak, such as Taro Kono and Shigeru Ishiba; or Sanae Takaichi, the standard bearer of the LDP’s right-wing, who would become Japan’s first female prime minister. But the most exciting possibility is generational change. Two potential candidates — Shinjiro Koizumi, the son of Junichiro, and Takayuki Kobayashi — are in their forties and would be the youngest postwar premier. If they believe they can run their own race and win without making too many promises in return for votes, they should put forward their names.
Kishida had the virtues and failings of a traditional LDP prime minister. The next leader has an opportunity to break the mould.
