Japan’s Prime Minister Shigeru Ishiba Resigns, Uncertainty Looms Over Crypto Policy

Japanese Prime Minister Shigeru Ishiba announced his resignation on September 7, citing the completion of US trade negotiations and rising dissent within his party. His decision, timed with President Donald Trump’s executive order reducing auto tariffs, ends his term earlier than expected and sets the stage for a leadership contest in the ruling Liberal Democratic Party (LDP).

Ishiba’s exit follows the LDP’s major defeat in July’s upper house elections and the mass resignation of four senior party executives earlier this month, leaving him politically isolated. With Ishiba stepping aside, the LDP will now choose a successor, but he confirmed he will not run again.

The leadership change raises questions about Japan’s economic policies, particularly cryptocurrency regulation and digital industry initiatives that advanced under Ishiba. In late August, Ishiba highlighted the importance of blockchain and AI in driving growth and solving social challenges. Industry advocates credit his administration, alongside Digital Minister Masaaki Taira, for supporting crypto tax reform and fostering a pro-innovation environment.

Two likely contenders have emerged: former Economic Security Minister Sanae Takaichi and Agriculture Minister Shinjiro Koizumi. Takaichi, leading in recent polls with 23% support, previously pushed for stricter rules on cryptocurrency exchanges and suspicious transaction monitoring. Koizumi, with 22% support, has called for greater digitalization in politics and hinted at a more open stance toward crypto and stablecoins, though he has yet to release a clear policy.

Markets reacted swiftly to Ishiba’s resignation. The yen weakened to 148.48 per dollar, while crypto-related stocks saw gains, including Metaplanet, Remixpoint, Ikuyo, and Livwork. Analysts suggest investors are betting on policy changes that could reshape Japan’s role in global digital finance.

The outcome of the LDP race will determine whether Japan strengthens oversight or continues Ishiba’s balanced push for innovation and regulation.