Japan set for leadership contest after prime minister announces resignation

Good morning. Today we’re covering:

• The court ruling that ousted Thailand’s prime minister

• Setbacks at Indonesia’s new jungle capital

• The search for life on Mars

But we start with Fumio Kishida’s decision to step down as Japanese prime minister in September, ending months of speculation over his ability to survive scandal and rising living costs.

At a press conference yesterday, Kishida said he would not seek re-election at next month’s internal poll for the ruling Liberal Democratic party presidency, which in effect grants the holder the position of Japanese prime minister.

The shake-up comes at a pivotal moment for Japan, which has taken on a more muscular defence role in the Pacific in the face of a rising China. The country’s economy also began to emerge from a decades-long campaign against deflation and low growth.

But Kishida’s three-year premiership was dogged by low approval ratings, caused in large part by a political funding scandal that forced him to sack four cabinet ministers in 2023.

Kishida’s decision came as a surprise within the LDP, where very senior figures had firmly believed that the prime minister intended to stand in the leadership election, according to several people close to the cabinet.

By pulling out, Kishida opens the way for multiple candidates to compete for the position. Political analysts have zeroed in on several contenders.

• Opinion: Kishida showed a surprising fearlessness, writes Leo Lewis, steering Japan through its most life-altering three-year period since the 1980s bubble.

Here’s what else I’m keeping tabs on today:

• Economic data: Japan reports second-quarter growth figures and China publishes July retail sales and industrial production data.

• Alibaba: The Chinese ecommerce company reports first-quarter results.

• Middle East: The US, Egypt and Qatar plan to mediate ceasefire talks, aiming to broker a deal between Israel and Hamas to end the Gaza war and secure the release of Israeli hostages.

• India and South Korea: Financial markets are closed in both countries as they celebrate their Independence Day holidays.

Five more top stories

1. Thailand’s constitutional court has dismissed Prime Minister Srettha Thavisin from office over a cabinet appointment it said violated ethical standards, throwing the country into fresh political upheaval. The court ruling followed tensions between Srettha’s Pheu Thai party and the conservative establishment.

2. The world’s largest steelmaker has warned that Chinese producers are in a fight to survive a severe and more protracted crisis than previous downturns. The steel industry “winter”, as China Baowu Steel Group chair Hu Wangming called it, comes as the Chinese property market suffers a crippling multiyear slump.

3. The World Health Organization has declared mpox a public health emergency in a sign of growing alarm over the infectious disease’s spread in Africa. Mpox, previously known as monkeypox, has become an increasing focus of concern as an example of the rising global threat of zoonotic diseases, which are transmitted from animals to humans.

4. Exclusive: Barclays drew up plans to pull out of future Israeli government bond auctions as it reviewed its exposure to the country under pressure from pro-Palestinian activists, according to people familiar with the matter. But the UK bank, one of seven foreign lenders that help the Israeli government sell new debt, informed Israel on Tuesday that it planned to continue to work as a so-called primary dealer.

5. Australia’s market regulator has sued the country’s stock exchange over a botched upgrade of its clearing and settlement systems to integrate blockchain technology. The watchdog alleged ASX was “misleading and deceptive” about the update, which was abandoned in 2022 after repeated delays.

News in-depth

Indonesia was set to hold a grand independence day celebration on Saturday in Nusantara, the new capital being carved out of the jungle with an estimated cost of $30bn. But the ambitious pet project of outgoing President Joko Widodo has been beset by delays, forcing the government to rescind foreign diplomats’ invitations just days before the August 17 festivities.

We’re also reading . . . 

• Iran’s Olympians: When they embraced in Paris, two Iranian athletes — one who left the country, and one who stayed — highlighted the dilemma facing Iranian youth, writes Najmeh Bozorgmehr.

• Starbucks: Can Brian Niccol bring the winning ingredients that pushed Chipotle’s stock price up by 800 per cent to his new job leading the world’s biggest coffee chain?

• JPMorgan: A number of high-profile departures of executives close to the bank’s president, Daniel Pinto, have raised questions about his future.

Chart of the day

Tech giants are poised to become some of the biggest energy users of the future as they race to develop power-hungry artificial intelligence, potentially threatening their commitments to net zero. Ahead of that, they are working behind the scenes to shape a once-in-a-decade rewrite of the rules governing how pollution from power use is disclosed.

Take a break from the news

Now that evidence of an underground water reservoir has been found on Mars, scientists are wondering what to do next. Anjana Ahuja explores the practicality of searching beneath the planet’s surface for life, while shielding it from the worst piratical instincts of our own species.

Additional contributions from Tee Zhuo and Harvey Nriapia