Japan's Prime Minister Resigns

Japanese Prime Minister Shigeru Ishiba announced his resignation on Sunday after a series of election losses, pushing world's fourth-largest economy into political uncertainty just as it clinched a trade deal with the US. Ishiba, 68, said he must take responsibility after his ruling coalition lost its majorities in both houses of parliament, driven by voters' frustration over the rising cost of living, Reuters reports. He described President Trump's tariffs as a "national crisis" but said the completion of negotiations means he can leave office now, per NBC News. "I believe this is precisely the appropriate timing," Ishiba told a press conference in Tokyo.

The ruling Liberal Democratic Party will hold an emergency leadership race, with Ishiba staying on as caretaker until a successor is chosen. The market responded swiftly to the news, with the yen and government bonds selling off as investors weighed the potential for looser fiscal policy under possible successors; Japan already had lowered its growth outlook because of the US tariffs. Party veterans Sanae Takaichi—known for opposing interest rate hikes—and farm minister Shinjiro Koizumi are among the contenders, per Reuters.

Ishiba, who only became prime minister after five tries for the top job, leaves behind a mixed legacy. He secured a major trade agreement and pledged significant investments but struggled to reassure voters as living costs climbed and Japan's auto sector was squeezed by US tariffs. The government has also been dogged by lingering reputational damage from A political finance scandal and an ongoing rice shortage also have hurt the government, per the New York Times. The far-right Sanseito party made gains in recent elections, signaling shifting sentiment even as most voters say they see no need for an early election.