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The Nine-Horse Race to Lead Japan

Following Japanese Prime Minister Fumio Kishida’s unexpected decision not to seek re-election, nine candidates to lead the ruling Liberal Democratic Party have emerged. They represent a range of political, economic, and social perspectives, highlighting the breadth of the LDP’s ideological spectrum.

TOKYO – Nearly two months after Japanese Prime Minister Fumio Kishida announced his decision to step down, the ruling Liberal Democratic Party is set to elect a new leader. With the LDP controlling the lower house of parliament (the Diet), the winner will automatically become prime minister, potentially reshaping the country’s political landscape.

The leadership election, scheduled for September 27, will be decided in two rounds. Notably, winning the first round does not guarantee victory. In 2012, for example, Abe Shinzō lost the first vote but ultimately prevailed in the second and returned to power.

The nine candidates vying for the LDP’s leadership represent a broad range of political, economic, and social perspectives, underscoring the diversity of views among the party’s upper ranks. The candidates also vary widely in age, with the youngest – Shinjirō Koizumi and Takayuki Kobayashi – both in their 40s.

Koizumi and Kobayashi may be relatively inexperienced, each having held only a single cabinet position, but this could work in their favor by distancing them politically from the kickback scandal that marred Kishida’s term and caused the LDP’s approval rating to plunge. Their image as fresh, untainted candidates could resonate with voters, a significant advantage given the likelihood of a snap general election once the new LDP leader is chosen. If either wins, Japan will have its first leader under 50 since World War II.

The other candidates are considerably older, underscoring the generational divide. The next youngest contender is the 61-year-old Taro Kono, who lost the 2021 leadership race to Kishida. An advocate of structural reforms, Kono has previously served as foreign and defense minister and is currently the minister for digital transformation.

Shigeru Ishiba, a prominent defense expert, has made four previous bids to lead the party. At 67, he has announced that this will be his final attempt. While he has consistently fared well with the party’s rank and file, he has struggled to win the support of Diet members.

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Two additional contenders – Toshimitsu Motegi and Yoshimasa Hayashi – are both former foreign ministers who also served as ministers of economic and fiscal policy. Hayashi, 63, is Kishida’s chief cabinet secretary and one of his closest political allies. The 68-year-old Motegi, the LDP’s secretary-general, has a strong economic background, having served as minister of economy, trade, and industry, along with a stint at McKinsey. Another candidate, Katsunobu Katō, 68, has served three terms as minister of health, labor, and welfare.

Lastly, two women are vying to make history as Japan’s first female prime minister. Sanae Takaichi, 63, ran for party leader in 2021. A prominent conservative and member of the late Abe’s faction, she is expected to draw support from his former allies. Yōko Kamikawa, 71, is the current foreign minister. She rose to prominence in 2018 when, as justice minister, she authorized the execution of 13 members of the Aum Shinrikyo cult, responsible for the 1995 sarin gas attack in the Tokyo subway.

These nine candidates are divided on fiscal policy. Motegi advocates scrapping the planned tax hike intended to fund an increase in defense spending from 1% to 2% of GDP, arguing that economic growth will generate the necessary revenue. By contrast, Ishiba has called for raising the corporate tax rate and introducing a tax on financial incomes, which are currently taxed separately from wages and salaries.

Most other candidates fall between these two extremes. Takaichi, for example, supports expansionary monetary and fiscal policies and opposes interest-rate hikes. While she champions two of the three “arrows” of Abenomics, she appears to overlook the fact that Abe himself raised the consumption tax twice in 2014 and 2019. Whereas Koizumi opposes taxes on financial incomes, Kono emphasizes the need for primary budget surpluses.

Beyond economic policy, the candidates also disagree on whether married couples should be allowed to retain separate surnames. Under current Japanese law, one spouse must adopt the other’s surname, with the bride typically taking the groom’s. While Koizumi and Kamikawa view changing the law as a progressive step toward gender equality, conservatives like Takaichi and Kobayashi argue that separate surnames could undermine family unity and confuse children.

Another point of contention is labor mobility. Koizumi has proposed eliminating Japan’s strict restrictions on dismissing “regular” or “lifetime” workers. Unlike the United States, where layoffs and cost-cutting measures are common, Japanese companies face significant legal and procedural hurdles when trying to shed permanent staff. Consequently, firms have become increasingly reluctant to hire full-time workers, instead relying on temporary and often precarious labor. Koizumi argues that making it easier for companies to part ways with employees whose skills have become obsolete – combined with a robust system for retraining and job placement – would improve overall labor-market efficiency.

Kono, too, has advocated increasing labor mobility, suggesting that voluntary separation with severance pay could offer greater flexibility for both workers and employers. But most of the other candidates are wary of easing layoff restrictions, fearing that it would increase job insecurity and social tension. Ishiba has said that his top labor-market priorities are expanding the number of permanent jobs and protecting job stability.

When it comes to diplomacy and national security, the candidates are more closely aligned. Ishiba believes Japan should strengthen its Self-Defense Forces in preparation for potential Chinese aggression against Taiwan, a view shared by Takaichi and Kobayashi.

The nine-person race showcases the LDP’s broad ideological spectrum, ranging from political moderates to staunch conservatives, and from economic progressives advocating tax increases to those favoring pro-growth policies. The outcome will largely depend on the coalitions that emerge after the first round of voting, when only two candidates remain, and the party’s final policy direction won’t become fully clear until a new cabinet is formed.

Should a general election be held within the next three months, as most analysts expect, the new LDP leader will face the challenge of persuading voters to reject the opposition Constitutional Democratic Party, which leans left on economic and social issues. Regardless of the outcome, by January, both Japan and the US will have new administrations, marking a watershed moment for one of the world’s most important strategic alliances.

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