TOKYO, (Reuters) – Japan’s Shinzo Abe yesterday said he was resigning because of poor health, ending a tenure as the country’s longest-serving prime minister in which he sought to revive an economy stricken by deflation and push for a stronger military.
His abrupt departure triggers a leadership battle in his Liberal Democratic Party (LDP) over the next few weeks. The winner will likely stick to Abe’s reflationary “Abenomics” policies that had mixed results in resuscitating the world’s third-largest economy.
Abe has battled ulcerative colitis for years, and two recent hospital visits within a week had raised questions about whether he could stay on in until his term ends in September next year.
Despite the deepening concerns about his health, news of Abe’s resignation sent tremors through Tokyo financial markets. Japan’s main stock market, which has more than doubled under Abe, fell some 2% before recovering, while the yen rose on concerns of a return to deflation.
“I cannot continue being prime minister if I do not have the confidence that I can carry out the job entrusted to me by the people,” Abe, 65, told a news conference as he announced his decision.
He said he wanted to avoid a political vacuum as Japan copes with the novel coronavirus. It was the second time Abe has resigned as prime minister because of poor health, the first more than a decade ago.
“I apologise from the bottom of my heart that despite all of the support from the Japanese people, I am leaving the post with one full year left in my term,” he said.
At times during his news conference he choked up and blinked back tears.
Apart from inheriting an economy in the throes of its worst downturn since World War Two, Abe’s successor will be left to try and ensure next year’s Olympics – already delayed for a year by the COVID-19 pandemic – will go ahead.
Former defence minister Shigeru Ishiba and former foreign minister Fumio Kishida quickly expressed interest in the top job, media reported. Among others whose names have been floated is Abe’s close aide, Chief Cabinet Secretary Yoshihide Suga.
“The broad picture remains intact. In terms of economic and fiscal policy, the focus remains very much on reflation,” said Jesper Koll, senior adviser to asset manager WisdomTree Investments. “Longevity will be a struggle.”