The ruling party in Japan is in crisis. It could get a new leader

Japanese Prime Minister and Liberal Democratic Party (LDP) leader Shigeru Ishiba could face calls for a change in leadership.

According to Reuters, party members are set to decide on Monday, September 8, whether to hold an extraordinary leadership election.

Ishiba has been under pressure since the March parliamentary elections, in which the LDP lost its majority in both chambers, making it more difficult to pass legislation.

The political instability led to sales of the yen and government bonds, with yields on 30-year bonds reaching a record high.

Markets expect that a possible replacement of Ishiba with his rival and proponent of looser fiscal policy, Sanae Takaichi, could also influence the timing of further interest rate hikes by the Bank of Japan.

Ishiba has so far refused to resign and plans to present an economic stimulus package in the fall to support the economy.

(reuters, sie)