Revolving Door of Prime Ministers: Japan’s Prime Minister Ishiba Resigns

September 16th, 2025
Rebecca Gehlmann

In Japan, the average tenure for a prime minister is merely two years, with leaders like Shinzo Abe being exceptions. Thus, the resignation of Prime Minister Shigeru Ishiba after a mere eleven months is no shock. However, his resignation comes at an inopportune time as his party, the Liberal Democratic Party (LDP), is facing plummeting approval ratings as Japan attempts to avoid an economic crisis.

Economic Woes

The root of Ishiba’s problems can be traced back to Japan’s faltering economy. While the country is still reporting increases in GDP, it is also facing a cost of living crisis and runaway inflation.

An article from Forbes helps explain the economics behind these issues. For years, Japan’s problem was too little inflation, an idea that seems foreign to observers in the United States. In the last few years, however, inflation had finally begun to rise–yet not in a good way. Japan has been dealing with cost-push inflation and a weakening yen: both of which have increased prices for consumers and raised concerns of stagflation—when prices rise but wages do not—in the country.

In order to combat this, the opposition Constitutional Democratic Party of Japan (CDPJ) has called on the country’s central bank to raise interest rates. Additionally, the CDPJ has called for the lowering of taxes, which risks further destabilizing Japan’s economy. Among advanced economies, Japan has the highest debt-to-GDP ratio, so the prospect of cutting taxes has set the warnings off in the country’s bond market (a bond is essentially a loan that is given to an issuer–in this case, the government–under the assumption that the issuer will pay periodic interest payments to the investor). Last week’s auction of 40-year government bonds showed record-low demand.

In lay terms, all of this can be summed up as rising rice prices. The price of this pantry staple has nearly doubled in a year due to uncontrolled inflation of food and supply shortages, causing malaise amongst the general public and frustration at Ishiba’s government.

This frustration manifested in the results of this summer’s election, which saw the LDP lose its majority in the upper house of parliament following a humiliating defeat in the lower house last year. In place of the LDP, the far-right nationalist party Sanseito, which built its platform on immigration concerns, gained thirteen seats in the 248-seat upper house.

So, as Ishiba resigns, it’s clear that his successor will have a long list of economic and social challenges to surmount.

Geopolitical Battles

Unfortunately, Japan’s woes don’t end there. The country has been attempting to find its footing in the tariff wars waged by the United States. In July, a deal was struck between Washington and Tokyo to set a baseline tariff rate, that also applies to automobile imports, of 15%. In return, Japan has pledged to increase investment in American projects and to import more agricultural goods, especially rice, from America. The deal was finalized last week with the signing of an executive order by President Trump.

Ishiba’s successor will also inherit a tense regional geopolitical situation–navigating through a region threatened constantly by the presence of North Korea and China.