Japanese Prime Minister Shigeru Ishiba has announced his decision to resign, less than a year after taking office on September 27, 2024. The announcement, reported by NHK on September 7, 2025, comes after a series of political setbacks for his Liberal Democratic Party (LDP) and its coalition partner, Komeito. A historic electoral defeat in the July 2025 House of Councillors election stripped the coalition of its majority in both houses of Japan’s parliament, intensifying dissent within the ruling party and leading to mounting pressure on Ishiba to step down. His resignation also follows closely after a high-profile U.S.-Japan trade deal that sparked both praise and criticism.
Background: Ishiba’s Tenure and Early Challenges
Shigeru Ishiba, a veteran politician and former defense minister, took charge of the LDP in September 2024, succeeding former Prime Minister Fumio Kishida. Ishiba entered office with ambitious plans to revive Japan’s economy and navigate increasingly complex international relations. However, his leadership soon faced turbulence both domestically and abroad.
In October 2024, shortly after taking office, Ishiba called a snap general election for the lower house. The gamble backfired, with the LDP-Komeito coalition losing its majority in the powerful lower chamber for the first time since 2009. Analysts described it as the party’s second-worst electoral performance in history.
The crisis deepened on July 20, 2025, when the coalition also lost its majority in the 248-seat upper house, falling short by three seats. This left the ruling bloc a minority in both houses of parliament, severely limiting its ability to push through legislation without opposition backing.
These defeats were widely blamed on voter frustration over economic pressures, with inflation outpacing wage growth, particularly for younger workers. Public anger was also fueled by an LDP funding scandal, while the rise of new conservative and right-wing populist forces, including Sanseito, ate into the party’s traditional support base.
Mounting Internal Pressure
The electoral setbacks emboldened Ishiba’s critics within the LDP. Prominent party figures, including former prime ministers Taro Aso, Fumio Kishida, and Yoshihide Suga, pressed him to resign. Ultranationalist factions in the party accused him of failing to unify the LDP or address voter concerns.
Initially, Ishiba resisted the calls, arguing that his departure would create a dangerous power vacuum at a time when Japan faced pressing economic and diplomatic challenges. However, with his approval ratings plunging to 23 percent in a July 22, 2025, poll and a no-confidence motion looming, Ishiba’s position became increasingly untenable.
Despite street protests in Tokyo calling for him to remain in office—fueled by fears that his resignation would open the door for a hardline leader such as Sanae Takaichi—party unity and political survival forced Ishiba’s hand.
The U.S.-Japan Trade Agreement
A key backdrop to Ishiba’s resignation was the controversial U.S.-Japan trade deal announced on July 23, 2025. Described by U.S. President Donald Trump as “the largest trade deal in history,” the agreement required Japan to pledge $550 billion in investments into the U.S. economy across sectors including semiconductors, energy, pharmaceuticals, and infrastructure. The investment was framed as a boost to U.S. jobs and industry.
In exchange, Washington agreed to reduce tariffs on Japanese automobile exports from 25 percent to 15 percent, while maintaining a 10 percent baseline tariff and pausing higher tariffs on steel and aluminum. The deal also guaranteed continued tariff-free quotas for rice imports into Japan and avoided new duties on Japanese agricultural products. Additionally, it offered expanded access for U.S. agricultural goods, defense equipment, and automobiles in the Japanese market.
The negotiations were difficult, with Japan’s chief trade negotiator, Ryosei Akazawa, holding eight rounds of talks in Washington. Ishiba emphasized protecting Japan’s auto industry and rice sector from excessive concessions. However, earlier in 2025, Trump had imposed a 24 percent “reciprocal tariff” on Japanese exports, which Japan considered unfair and inconsistent with WTO rules.
The deal was hailed by some as a diplomatic victory for Ishiba, preventing a worst-case scenario in which Japanese autos would have faced 25 percent tariffs that could have crippled the sector, which accounts for 28 percent of Japan’s exports to the U.S. However, critics in Tokyo derided the agreement as lopsided, noting that Japan’s massive investment pledge would strain government finances and possibly require loans, while Japanese exporters still faced 15 percent tariffs. Reports later surfaced that Japan’s envoy canceled a planned follow-up visit to Washington, citing frustration with the terms.
Ishiba’s Resignation and Its Implications
On September 7, 2025, Ishiba announced his decision to resign, citing the need to preserve party unity amid escalating internal dissent. His departure marked the end of a premiership defined by electoral losses, internal party strife, and tough international negotiations.
The timing was not unexpected. Japanese media outlets had reported as early as July that Ishiba might step down following the U.S. trade deal. Though he initially dismissed the reports, his weakened political position, coupled with opposition from party heavyweights, forced his resignation.
Several factors drove Ishiba’s exit:
The LDP’s unprecedented loss of majorities in both parliamentary chambers.
Internal divisions that risked fracturing the party.
Criticism of the U.S. trade deal, which many saw as a concession to Trump’s demands.
Ongoing economic challenges, including inflation and a weak yen.
What Comes Next for Japan
Ishiba’s resignation triggers a leadership contest within the LDP. Potential successors include hardline conservative Sanae Takaichi, though public protests highlight concerns over a shift toward ultranationalist leadership.
With the LDP and Komeito in a minority, Japan now faces political gridlock. Passing legislation will require cooperation with opposition parties such as the Constitutional Democratic Party of Japan or the Democratic Party for the People. While opposition divisions may prevent an immediate government takeover, the ruling party’s grip on power has weakened considerably.
Economically, the U.S.-Japan trade deal will shape the near future. Lower tariffs may help Japan’s exporters, but the enormous $550 billion investment commitment could strain public finances. A stronger yen, which may result from the deal, could benefit importers but hurt Japan’s export competitiveness.
Internationally, Ishiba’s resignation injects uncertainty into Japan’s foreign policy, particularly its balancing act between the United States and regional powers like China and South Korea. With President Trump’s tariff-driven trade strategy reshaping global commerce, Japan’s new leadership will face the challenge of renegotiating its position in a shifting geopolitical landscape.
Shigeru Ishiba’s departure underscores the volatility of Japan’s politics after decades of near-continuous LDP dominance. His resignation not only reflects the domestic challenges of rising prices, party scandals, and growing populism, but also the pressure of navigating an unpredictable global trade environment.
