Japan's Prime Minister Shigeru Ishiba resigns, the outlook for Crypto Assets monetary policy faces uncertainty.

Japanese Prime Minister Shigeru Ishiba announced his resignation on September 7, citing the completion of trade negotiations with the United States and increasing dissent within the party. This unexpected move has sparked a power struggle within the ruling party and also brought uncertainty to the government's previously strong push for Crypto Assets and digital industry policies. Potential successors Sanae Takaichi and Shinjiro Koizumi have differing views on digital assets, and their election will profoundly impact Japan's future direction in the Crypto Assets field.

Shiba Shigeo resigned under immense pressure

Japanese Prime Minister Shigeru Ishiba confirmed last Saturday that he will resign from his position, ending his term early. This decision was made after several weeks of pressure within the party to hold a leadership election earlier, and this move is also seen by the outside world as a vote of no confidence.

After Shigeru Ishiba announced his resignation, the Liberal Democratic Party will initiate a new leadership election to select his successor, and he has made it clear that he will not run. Ishiba stated that the timing of his resignation coincides with the conclusion of the Japan-U.S. trade negotiations. Just before he announced his resignation, U.S. President Trump had just signed an executive order aimed at reducing automobile tariffs.

This decision reflects a broader political turmoil. Following the ruling party's crushing defeat in the Senate elections in July, many in the opposition and within the Liberal Democratic Party called for Shigeru Ishiba's resignation. On September 2, four senior party officials, including Secretary General Hiroshi Moriyama, resigned simultaneously, leaving the Prime Minister politically isolated.

Impact on Crypto Assets and Digital Policies

Shinzo Abe's departure holds special significance for Japan's Crypto Assets and Web3 ecosystem. In late August, he spoke at a Web3 event in Tokyo, emphasizing the critical importance of startups in areas like blockchain and artificial intelligence for Japan's economic growth and social challenges. He had clearly stated his ongoing support for investment and regulatory reforms in the digital realm.

However, with the new leader set to take office, Japan's policy direction has become uncertain. Former Economic Security Minister Sanae Takaichi and Minister of Agriculture, Forestry and Fisheries Yoshikazu Koizumi have emerged as potential frontrunners.

A public opinion poll conducted last month by the Nikkei showed that Sanae Takaichi topped the list of candidates for the next prime minister with a support rate of 23%, followed closely by Shinjiro Koizumi with a support rate of 22%. Shigeru Ishiba ranked third with a support rate of 8%. Although none of them have presented a comprehensive policy framework, they have differing attitudes toward digital assets.

• Takashita Saema: She submitted a proposal in March calling for the establishment of a framework that allows financial institutions, including crypto asset exchanges, to share information on suspicious transactions. This system will help freeze accounts earlier. Given that the proposal has been implemented, Takashita Saema may be seen as leaning towards stricter regulation.
• Shinjiro Koizumi: He commented on a television program, saying, "The digitization process of politics is extremely lagging. Politicians urge the public to embrace digitization while repeatedly delaying it themselves. This is one of the reasons for the public's distrust in politics." Although Koizumi did not elaborate on his policies, his remarks indicate a more open attitude towards digitization, and he occasionally expresses support for Crypto Assets and stablecoins.

Industry advocates have stated that the Shiozaki government has maintained an open attitude towards proposals for cryptocurrency tax reform. This momentum primarily comes from Digital Minister Taro Kono, a politician known for supporting the relaxation of restrictions on digital asset trading. Whether this momentum can be sustained will depend on the next leader of the Liberal Democratic Party.

Market Reaction and Crypto-Related Stocks

The financial market reacted quickly to Shih Pao-Mao's resignation. The yen weakened, falling more than 1% against the dollar on Monday morning to $0.0067 (148.48 yen). Tomoyuki Ueno, chief economist at NLI Research Institute, believes that market expectations for fiscal expansion may lead to further depreciation of the yen.

Stocks related to crypto assets, particularly companies focused on digital asset trading, showed buying interest in the early session. Metaplanet rose to 716 yen (+0.42%), Remixpoint climbed to 317 yen (+1.37%), Ikuyo traded at 1,152 yen (+0.17%), while Livwork increased to 793 yen (+1.93%). Market analysts believe these trends reflect investors' expectations of future policy changes, which could reshape Japan's position in the digital finance sector.

The results of the Liberal Democratic Party leadership election will ultimately determine whether Japan continues to tighten Crypto Assets regulation or follows the gradual path of encouraging innovation while aligning with international standards, as seen under the leadership of Shigeru Ishiba.