Japanese Prime Minister Ishiba Steps Down Amid Party Turmoil

Embattled Japanese Prime Minister Shigeru Ishiba is reportedly stepping down to avert a division within his ruling party, according to sources on Sunday. This move injects fresh political instability into the world's fourth-largest economy. While the Prime Minister's Office declined to comment, Ishiba is set to address the nation at a forthcoming press conference.

Since his rise to power in September last year, Ishiba's coalition has suffered electoral setbacks, losing its parliamentary majorities. Voter discontent over rising costs has fueled these losses. Despite internal calls for his resignation after the upper house defeat, Ishiba has attempted to navigate trade tariff negotiations with the U.S. to stabilize the struggling automotive sector.

Fueled by increased political uncertainty, financial markets reacted last week with a sell-off in the yen and Japanese government bonds, hitting record highs. Anticipation builds around Ishiba's potential successors, including Shinjiro Koizumi and Sanae Takaichi, as the LDP schedules a leadership vote. The economic landscape might shift depending on the new leader's fiscal stance.

(With inputs from agencies.)