Japan’s ruling party must decide on its future direction with a new leader following Prime Minister Shigeru Ishiba’s resignation to take responsibility for July’s dismal election result.

Agriculture Minister Shinjiro Koizumi, a reform proponent, confirmed his entry into the race Tuesday, joining other candidates including former foreign minister Toshimitsu Motegi and Chief Cabinet Secretary Yoshimasa Hayashi. Takayuki Kobayashi, a former economic security minister, has also thrown his hat in the ring, and pro-stimulus right-winger Sanae Takaichi is expected to do so as early as this week.

Candidates began presenting their policy goals this week, ahead of the official campaign kickoff on Sept. 22. A Kyodo public poll released Friday showed Takaichi was the most popular choice among respondents in the general public, although they won’t have a vote. In the leadership contest scheduled for Oct. 4, just over 1 million rank-and-file party members nationwide will cast ballots.

The Liberal Democratic Party is looking to freshen up its leadership after losing control of both houses of parliament in two humiliating national elections under Ishiba’s watch. Those dismal results showed that voters were frustrated with the LDP’s inflation countermeasures, perceived corruption within the party and the influx of foreigners visiting and working in Japan.

The new leader will need to quickly bring together a party that is increasingly divided on whether to appeal to a younger generation concerned about the growing tax burden it faces to support an aging population or to attract the right-wing voters that have deserted the LDP for the small opposition party Sanseito.

Whoever succeeds Ishiba as the new leader, and most likely as prime minister, will face a challenging political landscape given the loss of the parliamentary majorities. To proceed with policy, he or she will need to secure sufficient support from the opposition. Most opposition parties have made demands for tax cuts that would put more pressure on Japan’s public finances, possibly generating heightened concern among investors.

Here’s a look at the potential contenders to replace Ishiba.

Sanae Takaichi

Hard-line conservative Takaichi tops the list in many recent opinion polls asking voters who should be the next LDP leader. Takaichi, who cites former UK Prime Minister Margaret Thatcher as a key inspiration, narrowly lost to Ishiba in a runoff in the LDP’s leadership race last year. If elected, she would become Japan’s first female prime minister. Like Thatcher, her leadership would likely swing the country toward conservatism on a political level. But on economic policy, a Takaichi-led LDP would likely move toward continued monetary easing and looser fiscal spending, a move that may unsettle investors with concerns about Japan’s fiscal status. Still, right-wingers in the LDP have been thinned out in the last two elections as voters opted for Sanseito. For some, Takaichi might also give the impression of the party reversing back toward the policies of former Prime Minister Shinzo Abe rather than moving forward with something new.

Shinjiro Koizumi

Koizumi launched his leadership bid on Tuesday, calling for party unity. The son of one of Japan’s most famous reformist premiers, Koizumi has been the face of the LDP’s policies to bring down the price of rice — a high-profile effort with huge cultural and political ramifications. Koizumi came third in the first round of voting in the LDP leadership election in 2024, behind Takaichi and Ishiba. His early lead in that leadership race campaign lost momentum partly for his comments hinting at the need to flesh out rough guidelines for redundancy packages. At 44, Koizumi would represent a new generation that might tap into traditional LDP supporters and swing voters who see the older guard of the party as out of touch. Still, his more liberal tendencies will likely turn off right-wingers within the party. Finance Minister Katsunobu Kato, a veteran of key Cabinet roles and a member of the conservative fraction, has announced his support for Koizumi. He is expected to outline more details of his policy platform soon.

Toshimitsu Motegi

Motegi was the first lawmaker to announce his candidacy. The 69-year-old LDP heavyweight brings extensive experience as foreign minister, trade minister and party secretary-general, but appears to lack the broad public appeal of some rivals. Motegi portrays himself as a tough negotiator who can effectively handle relations with the US based on his previous experience of dealing with Donald Trump during the US president’s first stint. A graduate of Harvard’s Kennedy School, he had stints at trading house Marubeni, the Yomiuri newspaper, and McKinsey & Company before becoming a lawmaker in 1993.

Key policies:

• Monetary: BOJ should normalize policy from its unconventional easing. He also said Japan is nearing the definitive end of deflation, though he is concerned that the rise in prices of late is not demand-driven.

• Economic: Pledges “trillions of yen in regional grants” to support households funded by surplus tax receipts.

• Coalition: Plans to find an extra partner among opposition parties that can agree on basic policies. Partners for talks may include the Japan Innovation Party (Ishin) and the Democratic Party for the People

Yoshimasa Hayashi

Following Koizumi’s entry, Hayashi also expressed his intention to run. Currently serving as chief cabinet secretary and one of Ishiba’s closest aides, Hayashi would be a continuity candidate for the LDP whose ascent would likely cause little if any turbulence in markets. He’s often seen as closer to China than other party heavyweights, but has rejected the criticism he’s pro-China, saying he’s someone who prioritizes dialogue. The ruling party has frequently relied on Hayashi for damage control in the past. When previous administrations needed a replacement for short-lived ministers, Hayashi came in and calmed the waters, a record that he highlighted during his run in the LDP’s leadership race last year. Hayashi studied at Harvard University and spent most of the Kishida administration as foreign minister. Ahead of the formal press conference, he suggested some ideas for his expected policy platform.

Key policies:

• Economic: Will implement policies to ensure wage growth continues to outpace inflation.

• Diplomacy: Will leverage his expertise as diplomacy and defense take on greater importance as Japan coordinates with US President Donald Trump’s administration.

• Energy: Will promote the restart of nuclear power plants.

Takayuki Kobayashi

Young and conservative, Kobayashi is making his second bid to lead the country. In a press conference Tuesday Kobayashi outlined key policy pledges ranging from a temporary tax cut to strengthening national security. “I want to support the working class and the middle class more,” Kobayashi said as he called for a limited-time income-tax cut. A former economic security minister, Kobayashi has recently been reaching out to Taiwan, and speaking about the importance of building supply chains that don’t rely on China. Kobayashi began his career in the Finance Ministry, and is a Harvard Kennedy School graduate. For the right-wing of the party he would provide a younger alternative to Takaichi that would feel less like Abenomics 2.0.

Key policies:

• Has vowed to call for a limited-time income tax cut while overhauling the income tax regulations in order to help working-age people.

• Also supports an increase in defense spending.

• Has said monetary policy is the exclusive responsibility of the BOJ.

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(With assistance from Taro Kimura (Economist) and Yuko Takeo.)

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