Japanese Politics Updates – September 28, 2025

In episode 242, we delivered a comprehensive briefing on Japan’s political, economic, and geopolitical landscape. This Synopsis is just an encapsulation for those who missed the Live broadcast or who prefer skimming an outline. As usual, Timothy Langley broadcast from the deck of Finnish sailboat, Gryms. This week, the focus was on the upcoming dynamic of the Liberal Democratic Party (LDP) presidential election, the weakening yen, inflation, and Japan’s role in global diplomacy. The LDP election will be next Saturday, with the winner likely to be Mr. Ishiba’s replacement as Prime Minister. Too much to discuss!

LDP Presidential Election

The LDP presidential election is scheduled for October 4, 2025, followed by the Diet’s selection of a new prime minister, as the current Prime Minister, Shigeru Ishiba, will resign shortly after this Saturday’s vote. The five candidates are: Shinjiro Koizumi, Sanae Takaichi, Yoshimasa Hayashi, with Takayuki Kobayashi and Toshimitsu Motegi unlikely to place in the top two.

Election Process

The election involves a two-phase voting system. In the first phase, all 47 prefectures vote en bloc, alongside LDP card-carrying members and LDP Diet members. If no candidate secures 50% of the vote, the top two candidates proceed to a second phase, where only Diet members and the 47 LDP chapters vote, heavily favoring Diet members.

Key Candidates

Koizumi and Takaichi are currently favored by media reports, but the race remains tight. Koizumi has strong endorsers, including Kono Taro and former Finance Minister Kato, but faces criticism in Bungei Shunju, a weekly rag magazine known for political scandals, in an article that distinctly weakens his position. Takaichi, aligned with the far-right, benefits from her affiliation with the late Shinzo Abe’s legacy and from Mr. Aso. Mr. Hayashi is a strong contender, potentially surpassing Koizumi due to his experience and alignment with the Kishida faction. Hayashi could make the top two, especially if geopolitical factors, like a potential visit from U.S. President Trump materializes.

Faction Dynamics

Despite the official dissolution of LDP factions, loose affiliations, particularly the Aso and Kishida groups, and remnants of the former Abe faction, play a significant role. Aso and Kishida are pivotal in swaying votes, with horse-trading (Ishiba, Suga, losers converting, etc.) expected during the brief window between the two voting phases.

Public Perception

The candidates’ televised appearances are more about personality than policy substance, disappointing some observers. Issues like the economy and foreign influx are mentioned, but candidates avoid direct confrontation or deep policy debates, reflecting Japanese cultural norms.

Economic Concerns

The yen closed at 149.71 against the dollar on Friday, nearing the critical 150 threshold, which often prompts Bank of Japan (BOJ) intervention to prop up the currency. A weaker yen boosts exports but increases import costs, particularly for food and fuel.

Inflation: Rising food prices, especially in Tokyo (home to 10% of Japan’s population), are a growing concern. Wages are not keeping pace, creating economic strain for workers.

BOJ Policy: The BOJ is unlikely to intervene immediately, even if the yen exceeds 150, until the LDP election and prime minister selection are finalized. The recent decision to sell exchange-traded funds (ETFs) caused a temporary Nikkei drop, but markets have since stabilized.

Geopolitical Developments

Prime Minister Ishiba’s recent trip to New York included a speech at the United Nations and a brief meeting with President Trump. His remarks on the 80th anniversary of World War II’s end aligned closely with Shinzo Abe’s established stance, avoiding controversy despite concerns from Takaichi and other Abe allies.

Global Tensions

Several global issues are impacting Japan: (1) Middle East conflicts, including Israel’s attack on a Hamas meeting in Qatar, raising tensions with Egypt and others. (2) Russia and China’s joint military maneuvers, (3) North Korea’s ICBM tests (capable of reaching the U.S. with nuclear payloads), and (4) U.S.-authorized kinetic actions in Venezuela.

Speculation about Trump visiting China for a trade deal, potentially a stopover in Japan, which could distinctly sway LDP voters’ perceptions of candidates’ suitability to engage with Trump.

Japan’s Role

Global observers have noted Japan’s diplomatic absence, and the new Prime Minister will need to reassert Japan’s position quickly amidst these tensions.

Diplomatic and Domestic Events

The ongoing Expo in Japan, with less than a month remaining, is seeing reduced high-profile delegations. Ishiba has been busy hosting international leaders, including African nations for TICAD, despite his impending resignation, but the flow has noticeably declined. Visitors to the Expo, however, are regularly exceeding 20,000/day.

Political Strategy and Coalition Dynamics

The Japan Innovation Party (Ishin) and the Democratic Party for the People (led by Tamaki) are potential coalition partners for the LDP, as the Constitutional Democratic Party is distinctly unlikely to join. Ishin’s focus on elevating Osaka’s status makes it a more flexible partner.

Faction Influence

The Aso and Kishida factions, along with unaffiliated former Abe faction members, will shape the LDP vote. A potential snap election, despite candidates’ denials, remains a possibility. Everything is up in the air.

Public Sentiment

Candidates are addressing issues like foreign influx, echoing sentiments from Ishin’s previous campaigns, though substantive policy discussions remain limited.

Q&A Preview

1. This appears to be yet another LDP presidential election where fundamental issues, existential issues affecting Japan are not even mentioned, let alone debated. Further statements are being made in the innocence of demographic data showing persistent decline of the Japanese population. Could you please comment on this?
2. Ishin declared that it is ready to talk with the next president of the LDP on joining the coalition. But they are not revealing who is their preference to be the next LDP president. This is wise at this point but by Saturday, their stance will be critical. And not just that, but they seek assurances that there will be no general election following the LDP presidential election. Your thoughts on this?
3. Do you see any possibility for an opposition coalition to once again unite against the LDP?
4. What do you think about the surprise selling of ETF exchange-traded funds by the Bank of Japan announced last week?
5. Could you please give us a little bit more about the concerns within the LDP regarding Ishiba’s U.N. speech on the 80th anniversary of World War II?

In Conclusion

Join us next week for Episode 243 as we dive into the fresh LDP election results and what they mean for Japan’s future. It’s going to be an exciting ride! Don’t forget to like, share, and comment; your thoughts make this community terrific and keep the conversation alive. See you Sunday!