Japan’s next PM aims for snap election, stocks sink

Japan’s incoming prime minister Shigeru Ishiba plans to call snap elections for October 27, supporting the Bank of Japan’s interest rate hikes and considering raising corporate levies. The leadership contest for the ruling party went down to the wire, with right-winger Sanae Takaichi initially tipped to win. Markets reacted positively to the prospect of Takaichi’s victory, sending stocks higher and the yen lower. Ishiba’s victory caused the yen to soar and stocks to plummet. He aims to boost the party’s popularity and restore confidence after a party scandal. Ishiba also plans to strengthen defense ties with neighboring countries and increase military cooperation. The government faces challenges in funding defense upgrades and recruiting military personnel due to Japan’s shrinking population. Despite Ishiba’s focus on improving public finances, questions remain over economic growth strategies. Chief cabinet secretary Yoshimasa Hayashi emphasized the importance of monitoring financial markets and managing the economy effectively.