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Graphic Truth: Japan’s Rice Price Explosion
One of the major factors that pushed Japanese Prime Minister Shigeru Ishiba to resign over the weekend was inflation. Although Japan’s headline figure of 3% may not seem all that high, the country had grown accustomed to rates at or below 1% between 2012 and 2022. What’s more, the headline figure masks soaring prices for a major staple Japanese food: rice. The cause? Extreme heat in 2023 and an earthquake last year spurred major supply shortages. Here’s a fine-grain look at rice price trends over the past year.
Japanese Prime Minister Shigeru Ishiba adjusts his glasses during a press conference as he announces his resignation, in Tokyo, Japan, on September 7, 2025.
Who will be Japan’s next leader?
Japanese Prime Minister Shigeru Ishiba’s resignation announcement on Sunday triggered the country’s second leadership battle in less than a year, plunging his center-right Liberal Democratic Party (LDP) deeper into a political crisis.
The party has held power for most of the last 70 years, but recently lost majorities in both houses of the National Diet and suffered a historic defeat in Tokyo’s city council elections. This string of defeats, combined with a stagnant economy and higher inflation, spelt the end for Ishiba.
The LDP must now select a new party leader, who is likely to replace Ishiba as prime minister. That process is likely to unfold in October, though it could come sooner given the urgency of the situation.
To better understand how the leader of Japan, the world’s fourth largest economy, got into this mess after less than a year in power, and who is most likely to replace him, GZERO spoke to one of the top experts on Japanese politics: Eurasia Group’s Japan Director David Boling.
GZERO: Why did Ishiba resign?
Boling: “Three strikes, you’re out,” is probably the most compelling argument against Ishiba. He basically was the leader of the party, and they had three elections where they lost. After that upper house election in July, there was a pretty hard push by a lot of conservatives to call for a special election. Ishiba has a three-year term that started last September, when he was elected. It is unprecedented for the LDP to call for basically a midterm intraparty election. Ishiba was able to stall that for a while, but the momentum started to come back strong.
Last week, they had set up a vote on Monday for whether to have a leadership election, and Ishiba saw the writing on the wall over the weekend. Instead of seeing how this special election would turn out, he could tell that he didn’t have the votes.
Who are the favorites to replace him, and what are their stances?
The two favorites to replace him are well known – they came in right behind Ishiba in the party leadership vote last September.
The person who finished second behind Ishiba was Sanae Takaichi. She is conservative, nationalistic, and a proponent of “Abenomics,” which is loose monetary and fiscal policy. But she’s probably best known for her nationalistic views. She’s a hawk. [She would also be Japan’s first female prime minister.] The person who placed third is Shinjiro Koizumi, a well known name in Japan because his father was prime minister. He’s young, charismatic, and popular. Since they are both members of the LDP, both candidates are broadly pro-US alliance, and right of center. I would put Koizumi as more moderate, and Takaichi as more conservative.
Last thing: what’s the biggest thing to watch out for going forward, once the new leader is determined?
Last October, the LDP and its junior coalition partner Komeito lost their lower house majority, so they now have to work with one of the opposition parties to have enough votes to elect the new LDP leader as prime minister again. I think that it is very likely that whoever is the LDP president will become the next Japanese prime minister, but there will have to be some sort of deal worked out with the opposition parties to have enough votes to approve that person as the next prime minister. The LDP-Komeito coalition may have to make concessions on items for the annual budget, agreeing to spending or taxing provisions favored by the opposition. So that will be the next big watch point.
Graphic Truth: Japan’s ruling coalition loses majority
Japan’s ruling coalition lost control of the upper house in Sunday’s election, further weakening Prime Minister Shigeru Ishiba amid growing domestic pressure and international challenges. To retain its majority, the Liberal Democratic Party and its partner Komeito needed to win 50 seats – they got only 47. This follows the LDP’s worst electoral showing in 15 years in last fall’s Lower House election. Rising inflation and opposition calls for tax cuts resonated with voters, while the far-right Sanseito party gained ground with a nationalist, anti-immigration platform. Despite the setback, Ishiba vowed to stay on, stressing the importance of upcoming US trade talks as Japan faces an August tariff deadline. For a refresher on why Shigeru was in such trouble to begin with, see here.
Containers on a cargo ship are seen at an industrial port in Tokyo, Japan April 3, 2025.
Beijing tries to woo an uninterested Tokyo over joint tariff fight
Chinese Premiere Li Qiang sent Japanese Prime Minister Shigeru Ishiba a letter asking that they “fight protectionism together,” according to local reports Tuesday, as both countries face potentially disastrous US tariffs.
“I don’t know what the equivalent in Japanese for ‘chutzpah’* is, but I think the Japanese bureaucrats will snicker a bit to themselves,” says David Boling, Eurasia Group’s director for Japan and Asian trade. “China has a tendency when relations with the US are not going well to suddenly become much more positive in their approach to Japan.”
China is Japan’s largest trading partner but a highly distrusted neighbor from a national security perspective. Japan launched trade talks with the United States last week, and Boling says Tokyo is determined to strike a deal.
“The United States is just too important as an ally and trading partner, and even if talks break down, they’re not going to look to China first,” he says.
What’s more, Ishiba faces a crucial election in the upper house of the Diet, Japan's legislature, in July, right around when the US tariff pause is due to expire. With his political life on the line, we’re watching for an agreement in principle to be sealed with the US soon.
*Chutzpah is 厚かましさ (astukamashi-sa), if you were curious.
Nine candidates for the Japan Liberal Democratic Party presidential election attend a speech meeting in Matsue City, Shimane Prefecture, Japan, on September 20, 2024.
Japan’s heavy hitters slug it out in leadership election
Japan’s Liberal Democratic Party will elect a new president to replace Fumio Kishida on Friday, as the unpopular prime minister prepares to bow out and give his successor a fresh slate ahead of a looming general election. Three names have emerged as the leading candidates: former Defense Minister Shigeru Ishiba, Economic Minister Sanae Takaichi, and former Environment Minister Shinjiro Koizumi, the likely favorite.
What are the candidates promising? Policy-wise, the differences are marginal. Takaichi is somewhat more hawkish on China and more supportive of late PM Shinzo Abe’s economic policies than her peers. All the candidates are strong supporters of the US alliance, though Ishiba went a little further than the others by calling for an Asian version of NATO. The winner will also influence when general elections are held, with Koizumi promising to hold the vote almost immediately while Ishiba and Takaichi display more caution. But a vote must be held before Oct. 31, 2025.
It’s worth noting that, if elected, Takaichi would be the first woman to rule Japan in its modern history, and possibly the first to rule in her own name since the 8th century.
How will the vote work? The first round will be open to both elected LDP legislators and rank-and-file members, with their votes weighted equally. If no candidate secures a majority — which is likely — there will be an immediate runoff between the top two candidates, where legislators have more weight. That dynamic works against Ishiba, who is not popular among party elites. Koizumi’s more moderate image might benefit him in a runoff against the conservative Takaichi, meaning he’s a good bet if he makes it through the first round no matter who he faces in the runoff.
Whoever comes out on top, the Biden administration is hoping they’ll take a leaf from their predecessor, says Eurasia Group’s David Boling. “The White House has loved Kishida, who has made the US-Japan alliance as strong as ever, and will hope the next prime minister follows in Kishida’s footsteps,” he says.