(Bloomberg) – Japan is known to conduct much of its political wrangling behind closed doors, often making business leadership contests dull. Wednesday’s vote to choose the next leader of the Liberal Democratic Party, who is expected to become prime minister, looks like a rare exception.
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Traders will need to stay glued to the race throughout the day as party members select one of four vying candidates to replace Yoshihide Suga in an unusually open election.
Here’s what to watch out for:
Unlike the truncated 2020 vote which saw Suga fill the void left by Shinzo Abe’s resignation, more than a million PLD grassroots members will join lawmakers in this election.
Each group has 382 votes, although this number may change in the event of abstention. The base finished voting on Tuesday while lawmakers follow on Wednesday, when the results of both are announced.
You can follow the play-by-play Wednesday on Bloomberg’s TOPLive blog.
(All times are estimates and in JST)
13h00: Start of the vote of the party legislators
2:20 p.m .: The results are announced
If a candidate obtains a clear majority of the votes – an unlikely outcome – he is declared the winner
Otherwise, a second round between the first two candidates begins immediately. In this vote, lawmakers retain their 382 votes, but only 47 go to prefectural chapters of base members
3:40 p.m .: Announcement of the winner of the second round
The winner will give a press conference around 6 p.m. and is expected to be elected Prime Minister when Parliament is convened on October 4.
It seems unlikely that a candidate will secure enough votes for a majority in the first round.
Public favorite Taro Kono “is likely to lead in the first round, but won’t get a majority,” Goldman Sachs Group Inc. economists wrote in a September 27 memo. Attention then turns to the number of legislative votes given to the second-place candidate, likely to be Fumio Kishida or Sanae Takaichi. The Kishida and Takaichi camps have pledged to cooperate if this scenario materializes, citing concerns about Kono’s retirement and energy policies, the Sankei newspaper said on Wednesday.
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SMBC Nikko Chief Economist Junichi Makino is among those who see Kishida as having the advantage in a runoff, but sees a path for Kono if PLD General Secretary Toshihiro Nikai seeks to block Kishida. If Nikai and the factions of Finance Minister Taro Aso vote Takaichi for the second round, then “a victory for Kono becomes possible,” he wrote.
It has been almost a decade since the PLD had an open battle for the leader. In a race similar to what was expected on Wednesday, Shigeru Ishiba finished first in that vote, but failed to secure a majority with Abe coming in second. In the second round, Ishiba was handily defeated and Abe was elected.
While on that day the second round result came before the stock market closed at 3 p.m., the reaction was mixed – the surge in Abenomics only came later in the year as it approached. elections, with the LDP still in opposition at the time.
Watch the media
With party members voting ending Tuesday, watch local media, which will conduct extensive polls to try to identify the winner. In 2012, the Sankei declared on the morning of voting that Abe was the favorite to win a second round, correctly predicting that Ishiba would win the first round but Abe would dominate the second round.
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