Japan needs a new leader

Japan’s problems stretch far beyond anger over corruption. [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Stubbornly low ratings left Japanese Prime Minister Fumio Kishida with little choice but [to step aside]( today ahead of September’s race to pick the next leader of the long-ruling Liberal Democratic Party. His successor may also struggle to hold onto voter support. After almost three years in the job, the once-popular premier said that the LDP needed [a new face at the helm]( to help draw a line under two scandals that have undermined public confidence — one about links to a fringe religion and another over slush funds. Freshening up the LDP’s image may go some way to improving its performance in the next general election, which must be held in the coming year or so. But the problems facing the most indebted of the world’s wealthy nations stretch far beyond anger over corruption. WATCH: Kishida won’t run for a second term as leader of the LDP. Isabel Reynolds reports on Bloomberg Television. Source: Bloomberg TV Kishida sounded the alarm over a dwindling population he said could leave society unable to function, and sought to resolve the problem by raising spending on children and young families to levels he said would match those of child-friendly Sweden. Anxious to demonstrate Japan’s ability to stand up to its increasingly threatening neighbors — alongside Russia’s aggression, North Korea has been shooting off missiles lately and a territorial dispute with China continues to simmer — he also pledged to increase defense spending by about 60% over five years. Yet a public that’s seen real incomes fall during his premiership is hostile to the idea of tax hikes to pay for these ambitious plans. That’s as the Bank of Japan [starts to normalize]( the ultra-easy monetary policy that’s helped limit the cost of more borrowing. Japan has a habit of churning through prime ministers. Whoever beats what looks to be a crowded field to take over from Kishida will be hard-pressed to find a way forward without alienating a disgruntled electorate.— [Isabel Reynolds]( Kishida during a news conference in Tokyo today. Photographer: Philip Fong/AFP/Bloomberg Global Must Reads Russia said its air defenses downed 117 drones and four tactical missiles over various regions, one of the [largest overnight attacks]( of the war. The governor of the Belgorod region, which borders northeastern Ukraine, announced a state of emergency as the Russian army continued to rush reinforcements to the neighboring Kursk region, where the Ukrainian military incursion entered a ninth day. The US approved the sale of as many as 50 F-15 fighter jets, vehicles and ammunition to Israel in a deal valued at more than $20 billion. The announcement yesterday highlights President Joe Biden’s determination to supply Israel the weapons it wants [despite growing criticism]( about its forces’ conduct in the war in Gaza and the growing civilian death toll. Thailand’s Constitutional Court dismissed Prime Minister Srettha Thavisin after finding him guilty of an ethical violation. Srettha’s ouster risks [unleashing political chaos]( in Thailand, where legal challenges have plagued the coalition government cobbled together after messy general elections last year. Foreign investors have pulled money from the country, concerned by both political risk and the government’s failure to revive Southeast Asia’s second-largest economy. Srettha Thavisin in Bangkok today. Photographer: Lillian Suwanrumpha/Getty Images US Vice President Kamala Harris will try to address mounting questions about her policy positions since clinching the Democratic Party’s presidential nomination last week by rolling out [details of her economic vision]( in North Carolina tomorrow. In the swing-state Democrats aim to carry in the November election, her focus is expected to be on persistently high inflation, which has soured voter perceptions of Biden’s administration. A bid to break up Alphabet’s Google is one of the options being considered by the US Justice Department after a landmark court ruling found the company monopolized the online search market. The move would be Washington’s first push to dismantle a company for [illegal monopolization]( since unsuccessful efforts to break up Microsoft two decades ago. Suspected attempts by Iranian hackers to infiltrate US presidential campaigns have set off a Federal Bureau of Investigation probe into the first major effort by a foreign actor to [disrupt the November election](. Bangladesh’s former prime minister, Sheikh Hasina, called for a probe into deaths associated with a [student-led uprising]( — Hasina faces a murder investigation along with former government officials for their role in suppressing the protests. Brazil is seeking liquefied natural gas supplies as dry weather threatens its vast hydropower production, a move that could further [tighten the global market]( for the fuel as demand grows from Asia to North Africa. Africa Centres for Disease Control and Prevention declared a fast-spreading mpox outbreak a continent-wide [public health emergency]( as it seeks to marshal resources, including vaccines for the only continent where the disease is endemic. Washington Dispatch Former President Donald Trump will deliver remarks focusing on the economy at a rally today in Asheville, North Carolina, a state with 16 electoral votes that Republicans struggle to keep from falling into Democratic hands every four years. The speech takes place as he tries to forge an effective response to Harris after she upended the contest and [erased his advantage]( in many polls. Since 1980, only one Democratic presidential candidate — Barack Obama in 2008 — has won the state. Polls, however, project a close race in November. One thing to watch today: The consumer-price index for July will provide the latest look at US inflation, with forecasters expecting another modest increase, reinforcing [expectations]( for a Federal Reserve interest-rate cut in September. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day The cost of the cheapest brands of food and drink in the UK rose by more than premium goods over the past two years, leaving the poorest to shoulder the highest burden from inflation, [according to a new analysis](. The Institute for Fiscal Studies said that the price of the least expensive goods in grocery stores jumped 32.6% from 2021 to 2023, about double the pace of the 15.8% increase recorded for the most expensive products. The IFS dubbed the trend “cheapflation.” And Finally International students have long been a golden goose for universities but now face [an increasingly uncertain future]( as governments seek easy targets to rein in surging immigration. In the UK, the new Labour government has vowed to retain a ban on students bringing dependents to Britain — the largest source of migration since 2019. A clampdown [in Canada]( is forcing “puppy mill” colleges to shut down programs. Economic arguments about the benefits of a booming education sector are taking a back seat to political ones. Students at the University of Toronto campus. Photographer: Angela Lewis/Bloomberg More from Bloomberg - Check out our [Bloomberg Investigates]( film series about untold stories and unraveled mysteries - [Bloomberg Opinion]( for a roundup of our most vital opinions on business, politics, economics, tech and more - [Next Africa]( a twice-weekly newsletter on where the continent stands now — and where it’s headed - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - Explore more newsletters at [Bloomberg.com](. Follow Us Stay updated by saving our new email address Our email address is changing, which means you’ll be receiving this newsletter from noreply@news.bloomberg.com. 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