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Reiwa 6-Year Liberal Democratic Party Presidential Election: Results and Future Focus Compilation

2024-10-01

■ In the six-year Liberal Democratic Party presidential election, the results of the first round of voting and the final election caused significant fluctuations in some markets.
■ The newly appointed CEO, Shigeru Ishiba, has left a deep impression on security and local revitalization, with an estimated budget of about 4 trillion yen for economic measures.

   The Liberal Democratic Party's presidential election in 2024 will be announced on September 12th, and voting and counting will take place on September 27th. In the first round of voting, no candidate received more than half of the votes, and the candidates who entered the final round of voting were Sanae Takaichi and Shigeru Ishiba. In the end, Shigeru Ishiba received 215 votes and was elected as the 28th President of the Liberal Democratic Party.
   Firstly, some market fluctuations observed in Tokyo on September 27th should be considered temporary. In terms of financial markets, because Sanae Takaichi is regarded as a supporter of financial easing policies, she led the vote in the first round of voting, enhancing the market's expectations for continued financial easing, leading to a rise in Japanese stocks and a depreciation of the yen. However, with Shigeru Ishiba's victory in the final election, expectations of financial easing have faded, leading to increased volatility in Japanese stocks and yen appreciation. The financial market's reaction may be related to Shigeru Ishiba's statement that "it is necessary to re-evaluate Abenomics" and the market's concerns about his possible push for strengthening financial income taxation.
   Shigeru Ishiba's policy direction gives the impression that he has invested significant energy in security and local revitalization, including advocating for establishing an "Asian version of NATO." Regarding economic and fiscal policies, he is expected to essentially inherit the line of the Kishida government and has not yet shown prominent personal characteristics. The first thing worth paying attention to is the budget size of economic countermeasures. According to the Cabinet Office's calculations, Japan's supply-demand gap is about -0.6% as of April-June this year. Therefore, the budget size for economic countermeasures is expected to be around 3 to 4 trillion yen. In the presidential election, Shigeru Ishiba's policy proposals covered five significant projects, including "political reform," "diplomatic security guarantees," "local revitalization 2.0," and "establishing a disaster prevention province. In terms of economic and fiscal policies, he proposed prioritizing the elimination of deflation while promoting fiscal soundness, respecting the independence of the Bank of Japan, and implementing energy policies, including nuclear power. Budget allocation and its funding sources will become a focus of attention in the future.
   At the temporary parliament meeting on October 1st, Shigeru Ishiba is expected to be appointed as the 102nd Prime Minister of Japan. However, in the final election, the vote difference between him and Hayao Takashi was only 21, indicating that Shigeru Ishiba's party foundation was not as solid as when the new government was established. The current circulating candidates for the Liberal Democratic Party's "three elections" (such as the Secretary-General) are considered to be candidates who prioritize stability, which also reflects this situation. In the future, when the new regime of Shi Po formulates an economic growth strategy, it is expected to incorporate proposals such as conventions put forward by other candidates.
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