PM Ishiba Refutes Reports of Imminent Resignation Following Surprise US Deal

His party's historic defeat in Upper House polls may prove to be a career-ending blow

- Walter Sim

TOKYO - Japan's embattled Prime Minister Shigeru Ishiba denied on July 23 that he was about to quit, saying there was "not a single grain of truth" in source-based reports that said he would step down within weeks.

News of a looming resignation, likely after key political events in August, had threatened to eclipse a surprise trade deal struck with the US just hours earlier, which shaved "reciprocal" tariffs from 25 per cent down to 15 per cent.

Despite Mr. Ishiba's denials, the reality is that his position is increasingly precarious after his ruling Liberal Democratic Party (LDP) suffered a historic defeat in the Upper House election on July 20, following a decisive trouncing in Lower House polls in October 2024.

The crushing outcome has stirred the hornet's nest and might prove to be a career-ending blow, as the LDP and coalition partner Komeito now lack a majority in both Houses of Japan's bicameral Parliament.

It remains uncertain whether the US trade deal will quell the brewing civil war within the LDP and offer Mr. Ishiba some breathing room.

The Nikkei 225 index rallied, briefly soaring more than 1,500 points to a one-year high before paring some gains to close 1,396 points, or 3.5 per cent, higher at 41,171.32.

The trade deal not only provided significant relief—the 15 per cent rate is the lowest so far among countries with a trade surplus with the US—but also spared Japan from making substantial concessions in its two "sacred cow" industries: cars and rice.

However, it does not erase the precedent of Japanese leaders resigning in disgrace after electoral setbacks, a fate Mr. Ishiba is resisting.

At a half-hour news conference on July 21, Mr. Ishiba used the word "responsibility" 10 times as he tried to justify his leadership.