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Shinjiro Koizumi has officially entered the race to succeed Prime Minister Shigeru Ishiba, positioning himself as a frontrunner in Japan’s ruling Liberal Democratic Party (LDP) leadership contest. Announcing his candidacy on Saturday, Koizumi vowed to prioritize revitalizing Japan’s economy by boosting wages, productivity, and consumer spending to counter rising inflation.
“Japan’s economy is shifting from deflation to inflation,” Koizumi stated, stressing the need for wage growth that outpaces price increases. He promised immediate measures to ease the burden of higher living costs, including slashing gasoline taxes, expanding household tax exemptions, and compiling a supplementary budget to support struggling families. His ambitious plan also aims to raise average wages by 1 million yen ($6,800) by fiscal 2030.
On monetary policy, Koizumi emphasized cooperation with the Bank of Japan to secure stable prices and sustainable growth. He pledged to balance fiscal discipline with strategic spending, using increased tax revenues from inflation to fund growth-oriented policies. Market watchers have shown strong interest in the LDP race, with speculation that Japan’s next leader could drive fiscal stimulus, pushing up government bond yields.
Koizumi faces competition from veteran lawmaker Sanae Takaichi, a fiscal dove who has criticized previous BOJ rate hikes. However, analysts see Koizumi as a leading contender to take the helm on October 4. Although the LDP lost its majority in both houses under Ishiba, its dominance in the lower house keeps the path to premiership open for the new party leader.
Koizumi also pledged greater government support for corporate capital expenditure to strengthen Japan’s manufacturing sector. “We need to build a strong economy backed by growth in both demand and supply,” he said.
