Photo/Illutration Shigeru Ishiba, a former secretary-general of the ruling Liberal Democratic Party, speaks with reporters in late January. (Takeshi Iwashita)

Former defense minister Shigeru Ishiba is corporate Japan’s top choice to replace Prime Minister Fumio Kishida, edging out Sanae Takaichi, who strives to become the nation’s first female premier, a Reuters survey showed on Thursday.

The ruling Liberal Democratic Party is set to hold an election on Sept. 27 to pick its next leader who will become the prime minister given the party’s control of parliament. Kishida will not run in the race.

The winner will be tasked with leading the LDP to victory in a lower house election that could take place as early as this year and working closely with the next president of key ally the United States amid China’s economic and military expansion.

About 24% of respondents named Ishiba as the most desirable candidate, compared with 22% for Economic Security Minister Takaichi and 16% for Shinjiro Koizumi, the 43-year-old son of former premier Junichiro Koizumi.

Ishiba generally fares better than Koizumi in public opinion polls, but Koizumi has often come out on top among LDP supporters.

Ishiba has held cabinet portfolios for agriculture and reviving local economies besides serving as defense minister and LDP policy chief.

The 67-year-old former banker has said his top priority would be to achieve a clear exit from deflation and encourage investments in growth areas by both the public and private sectors.

“He has a wealth of experience. He seems to be the kind of person who will press ahead with reforms without paying heed to party factions,” a manager at a food company wrote in the survey.

Takaichi, 63, is calling for strategic fiscal spending in cutting-edge technologies to drive the economy, while former environment minister Koizumi, who, if elected, would be Japan’s youngest-ever leader, plans to “basically carry over” Kishida’s economic policies.

Kishida focused on boosting household income by prodding businesses to hike wages and laid the groundwork for the Bank of Japan to phase out its radical monetary stimulus by appointing academic Kazuo Ueda as the bank’s governor.

Rising prices topped the list of high-priority issues that the Japanese business community wanted the next prime minister to tackle, followed by fiscal reforms.

Japan is saddled with the industrial world’s heaviest debt load, at more than twice the size of its economy.

Nikkei Research reached out to 506 companies from Aug. 28 to Sept. 6 on behalf of Reuters for the survey, with 245 firms responding.

RATE HIKES

On monetary policy, nearly two-thirds of respondents said they appreciated the BOJ’s rate hike in July, which took the short-term policy target to 0.25% from a range of zero to 0.1%.

Asked about the appropriate timing for an additional rate increase, 20% picked December 2024 and 27% chose the first quarter of 2025, while 21% said they opposed any more rate hikes.

“With other countries cutting rates, we don’t really see the need to rush into another rate hike and weaken international competitiveness and companies’ earning power,” a manager at a machinery maker said in the survey.

About 29% of respondents said a rate hike to around 0.5% could affect their plans for raising funds and wages, while 11% said a 0.75% rate would have that effect and 27% said a rate of about 1.0% would be the threshold for such an impact.

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