Bloomberg Audio Studios, Podcasts, radio news.
This is Bloomberg day Break Weekend, our global look at the top stories in the coming week from our day Break anchors all around the world. Straight ahead on the program, and look ahead to this week's long awaited interest rate decision from the Federal Reserve. I'm Tom Busby in New York.
I'm Caroline Hetker in London, where we're looking ahead to President Trump's second state visit to the UK.
I'm Dot Krisner with a preview of next week's rate decision from the Bank of Japan.
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg eleven three Yeero, New York, Bloomberg ninety nine to one, Washington, DC, Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, Syria, XM one twenty one, and around the world on Bloomberg Radio, dot Com and the Bloomberg Business App.
Good day to you. I'm Tom Busby, and we begin today's program with a decision on rates from the Federal Reserve this Wednesday. All signs point to a twenty five basis point rate cut, But could the central bankers go even bigger? And how does the FED sea inflation, the labor market and other fundamentals of the US economy. For more, we're joined by Michael McKee, Bloomberg International Economics and Policy correspondent. Well, Michael,
thank you so much for being here. Let's just start with what you expect the FED to decide this week, how you think sentiment will be split among the voting members of the FOMC, and what does the FED sea as far as inflation they're dual mandates of inflation and the labor market.
Well, a lot of interesting questions there, which is something that I hadn't been able to say going into a lot of FED meetings in recent months. The Fed is probably going to do it's twenty five basis point cut. The data that have come in suggests that the economy is weakening on the labor mandate side, still an issue on the the inflation side, which will keep them from
doing fifty basis points. But the question is what do they do after the September seventeenth meeting, And that's where we may see some market moving or things that will cause the markets not to move if you get what I mean in the sense that if the markets are expecting something there's a potential for surprise, and that is what do they think the path is going forward? Is the inflation that we got this past week enough to warn them off of saying anything specific about October and
December those FED meetings? And what does the dot plot say about next year and the path of rates going forward? Do they lower the terminal rate? Do they say that rates are going to go even lower than the markets had anticipated, which they have said is about three percent. So there are a lot of open questions out there that people are going to be asking, and the idea of what they think about inflation is going to be a good question for J.
Powell.
Well, let's talk about inflation, because this last week we got a couple of reads. We got producer price index which actually surprised to the upside a little bit, not much down one tenth of a percent. Consumer prices though a little bit hotter than forecast, higher costs for housing and of course food, not good news for this president who insists the food prices have been plummeting on his watch. What were your big takeaways from that, CPI read in August.
Well, there is a political component to it, and the food and gasoline prices were up significantly, and so that's not going to be a good look for the president. But what was really interesting is it wasn't so much the goods prices that went up as the services prices. The goods prices we expected to rise because we thought the tariffs would leak into the data, but things like furnishings. Household furnishings only up a tenth of a percent, toys
were down eight tenths of a percent. But we saw service prices, particularly for things like airline fares lodging away from home, those went up significantly. And if service prices are going up unrelated to tariffs, that's an inflation problem that the Fed will have to address in a different way than the way they would think about it in
terms of tariff driven inflation. So they're going to have to keep a close eye on this, which is why I think, to answer my own question that I posed about what do they do for October in December, I think they kind of punt on giving serious guidance on that because they'll want to see more data between now and then.
Did you see any other good news as far as inflation.
Yeah, in some areas of service prices. Medical care services were down a tenth of a percent, recreation services down two tents. And people thought that those would be areas that might rise because they had risen in previous months service price increases. In this case they did not. So it's not an easy thing to say what is causing the service price inflation to rise, and that's something the FED is going to want to investigate.
Well, let's talk then about the labor market, which every sign we're seeing it continues to weaken. And just this past week we got what a near four year high on jobless claims. What's your read on that and what is the FED see?
You need to take it with a little bit of caution because the last week before this past week when the jobless claims were tallied was the week with Labor Day and a holiday. Is always difficult to seasonally adjust for the Department of Labor because the holidays move around. So in this case we can look at it with a sort of a jaundic sty say this is something to worry about if it continues.
The Fed's two day policy meeting kicking off this Tuesday, a decision Wednesday, followed by a Jerome Powell press conference our thanks to Michael McKee, Bloomberg International Economy and Policy correspondent. We move next to corporate earnings from the shipping and logistics giant FedEx, coming out on Thursday after Wall Street's closing bell, just ahead of the industry's peak holiday shipping season.
How are rising costs, worries about US consumer spending, and the end of deminimous exemptions on small package shipments into the US all impacting the company? For more, we're joined by Lee Clasgow, Bloomberg Intelligence Senior Transport, Logistics and shipping analysts. Lee, thank you so much for joining us. You know, FedEx coming off a very solid earnings beat for the springs fourth quarter, saying it's successfully slashed four billion in costs.
It plans to cut a billion more this fiscal year. But FedEx and the whole industry now facing a lot more headwinds. So what are you expecting to see in this week's earnings results.
Yeah, it's gonna be tough. They're facing a lot of headwinds. A lot of those headwinds are related to the kind of more protectionist stances from the Trump administration. One of those which actually had bi partisans support back in the Biden days was getting rid of demnimous exemptions, which really allows lower value goods to be imported into the United
States without facing any duties or tarifs. And that that floor was at eight hundred dollars and so what that did is allowed a lot of e commerce providers outside the United States to directly shift to consumers. So you know, if you bought that thing, that that skirt or T shirt from Sheen or something off of Team U or even off of the Amazon marketplace, some of that stuff might have been originated in China and you know it's going into the United States and kind of avoiding custom
duties because of that loophole. And you know, they got rid of that loophole for imports that are going into the United States from China and Hong Kong in May. They also got rid of that loophole for everyone else at the end of last month. So you know, we're really going to start to see the impact. And you know, FedEx kind of doesn't report on a calendar basis. They
have on physical basis. And you know we heard from UPS already and they said, you know, for two months of their quarter that they reported which this will be included in FedEx earnings, is that you know, their China to US business was down pretty significantly and we expect that read through to apply to FedEx as well. And then you know, FedEx is also dealing with, you know,
a weaker industrial economy. People don't really think of FedEx as a trucking company, but they're they're actually the largest less than truckload provider. That's a business that they're looking to spin off, but they still operate it and it's really tied to you know, industrial production is m and the ism has been you know, contraction territory for I believe thirty one out of the last thirty three months. So you know that's going to definitely weigh on tonnage.
So you know, volumes are really facing headwinds, whether it's their parcel international parcel business or their you know, less than trucklo business and FedEx freight.
Now these are big changes, right, I mean, we could really see a significant hit to earnings, maybe not in this report, but certainly in the next one.
Yeah, you know, I think all eyes will be on, you know, any guidance that the company is able to offer. Companies in my world have been less apt to provide guidance at least longer, longer term guidance, just because of the uncertainty tied around the trade policies out of Washington, which has created a significant amount of volatility and uncertainty. We'll see kind of where management thinks they're going to be. My guess is though they probably will provide, if any insight,
maybe into their second quarter. Just again, given that, you know, everyone's crystal ball is quite foggy and correct right now.
Yeah, yeah, Well, well let's talk about something you brought up is the possibility of spinning off FedEx Freight. But FedEx had a couple of initiatives Drive and Network two point zero. How have the company cut costs and shed businesses? How has that impacted the business? And what is there left besides FedEx Freight to cut?
Yeah, so, you know, looking at FedEx as a whole, you know, they're doing a number of initiatives you mentioned Driver Network two point zero that are trying to take out costs of the network. Is what they really need to do, is they really need to restructure their networks to the new reality. You know, the old reality would be you know, one hundred envelopes go to a lawyer's office, and that FedEx driver would pick up another one hundred envelopes to be delivered. And that kind of density really
helps with margins. And you know, fast forward to today, we're all buying things from Amazon or wherever, and we get one package per day, and those deliveries are extremely expensive, and that's been really weighing on margins. So you know, we're not going backwards, we're going forwards. Is probably just going to be more B two C UH traffic relative
to B two B traffic UH. And and so they're they're making changes in Those changes include increasing automation, UH, reducing overlaps, and networks they're combining uh, you know, slowly combining their ground and air networks, something they've been really you know, they push back for a number of years about doing and then they're finally now leading into that.
And what I would say is that some of the benefits that they're generating from these changes were probably not going to really see them that much, because to really see them, you need you need good volume growth, You need that that that that operational leverage that you're going to get. So I suspect, you know, when things do
turn around. You know. Again, the big question is when you are going to see that flywheel start operating in that that operating leverage, generating better margins than they are today. But the but the problem is is that you know FedEx and and you know it's competitor ups kind of a show me stories because they're both undergoing these kind of restructurings. And we really have to see a how these companies look coming out of these restructurings and from
an operational standpoint when I'm talking about restructurings. And then also you know, b what does that new network from a profitability standpoint look like when volumes are back on track for growth.
Hello, a lot to look forward to. FedEx fiscal first quarter earnings out this Thursday after Wall Street's closing bell Our thanks to Lee Klascal, Bloomberg Intelligence senior Transport, Logistics and Chipping analysts and coming up on Bloomberg Day Break weekend, President Trump heads to the UK. I'm Tom Busby, and this is Bloomberg. This is Bloomberg Day Break Weekend, our global look ahead at the top stories for investors in
the coming week. I'm Tom Busby in New York. Up later in our program and look ahead to a monetary policy decision from the Bank of Japan. But first, just a few weeks after President Trump's personal visit to Scotland, He's headed back to the UK, where he's expected to mix royal mingling with important geopolitical discussions on a three
day trip. But the visit takes place under the shadow of the sacking of Peter Mandelssohn as the UK's US ambassador for previous links to disgrace financier Jeffrey Epstein for more, Let's go to London and bring in Bloomberg day Break euro banker Caroline Hepger.
Tom Britton's ambassador to Washington, Peter Mandelsson, has recently been removed from his post after further revelations about the extent of his relationship to the late p Dephar financier Jeffrey Epstein. That decision comes only days before President Donald Trumps state visit to Britain, the UK ambassador to Washington usually playing a key role in those events, and it complicates what
is an already careful, fully choreographed few days. It's an event that will be important to UK Prime Minister Kirs Starmer, who has prioritized good relations with Donald Trump since taking office just over a year ago, stressing the importance of Britain's defense and security alliance with America and taking care
not to openly criticize Trump's tariff policies. When Stalmer visited the Oval Office back in February, he brandished the King's invitation to Trump, which the U S President called an honor, describing King Charles as a beautiful and wonderful man. Those overtures appear to be paying off, at least in part. The UK became the first country to sign a tariff reduction deal with the US in May, with some of it already implemented. However, some tensions remain. For example, steel
is an area of issue. UK officials are still working to secure a deal that would remove the twenty five percent US tariffs on the sector, as to a drag on for months after Prime Minister Starmer and President Trump agreed a broader tariff cutting plan. There are also geopolitical issues too, with the potential to spark turbulence in the
so called special relationship. The US Ambassador to Israel said last month that the UK and France have handed victory to hamas by announcing intentions to recognize a Palestinian state. The visit also takes place during a testing time at home for Starmer. He's facing scandal within his own party and he's battling challenges from the right wing party Reform UK, who have proven popular in the polls. The group's leader, Nigel Faragh, recently visited the White House at the invitation
of Donald Trump. Bloomberg's London bureau chief Ruth David explains why that trip spoke volumes.
That photograph of him standing with President Trump. I mean a photo speaks more than all of the real of coverage right to have that kind of backing and to have that kind of support globally. We saw Tony Blair going to the US, We're seeing Nigel Farad and the question is where is Gastamo? And I know Donald Trump is coming to the UK later, but it definitely seems to be like for urges riding on a hype.
That was Bloomberg's, with David speaking there to Bloomberg's Tom McKenzie and Guy Johnson. So will the honor of a royal banquet be enough to curry the favor of President Trump? Is something I've been discussing with Bloomberg's political correspondent Ellen Milligan. Ellen, just, firstly, what are we expecting to see President Trump do on this second state visit that he's paying to the UK.
Yes, I mean this has never happened before that. Only other US presidents who have had a state visit were Barack Obama and George Bush. But no other president has had two state visits. This one will be a bit different from the last. First of all, what will be hosted by King Charles. The last one in twenty nineteen was obviously hosted by the Late Queen. The other big change is that it will be primarily hosted at Windsor
Castle because Buckingham Palace is undergoing renovations. So there will be the usual traditional state banquet, the exchange of gifts between the King and Queen and the President and the First Lady. Usually they have some kind of private meeting, either over lunch or tea when the President first greets them. Then they'll have this banquet where we're expecting a lot of famous businessmen and celebrities, as well as the border royal family to be there, like Prince William, who Trump
has also met before. And then after all that pageantry, there'll be the political portion where Trump goes to visit Prime Minister in his countryside estate at Chequers for a bilateral meeting.
Huge opportunity then for the UK to be front of the you know, to show off what they want to offer. I'm sure in terms of business ties, Kis Starmer will surely be trying to use this as kind of bargaining power. What do you think is going to be his main message?
Yeah, I mean the Prime Minister is effectively using the King as his chief diplomat and it's already paid off for the UK. I mean, you'll remember the moment where Kis Starmer visited the White House in February and brandished this letter hand signed by the King himself inviting the President over to the UK again. That I think, in large part has been why Trump and Starma have managed
to establish a close relationship despite their political differences. And you know, the UK was the first country to sign a trade agreement where they avoided the same level severe tariffs that other allies did. He Trump was also hosted by the UK in Scotland couple of months ago. That was a private visit but had very much a political element where he was mostly promoting his golf courses but also had a meeting with Starma and with the EU's Wonder Lion while there as well. So it's already paid
off for Starma. I think he's hoping that other deals could be struck, potentially on tech, potentially on AI, although this state visit will will mostly be about the royal element rather than the political one.
Absolutely, it seems I think to many observers in the UK a bit like a Netflix movie Letter to the King could have been the title. And it was also seen as quite a savvy move by the British Prime Minister by some voters because President Trumps still deeply unpopular, isn't he amongst a lot of voters? And yet there's also an edge to voters in the UK that they understand the UK has to try to do well by obviously its biggest ally in the world in terms of
how we should expect then the negotiations to go. Do you think that there are going to be specific things that Starma can perhaps gain from this, maybe on steel, as you say, which is still got levees from the US. I mean, Britain managed to get what has been seen as a better trade deal than a lot of other countries.
Yes, that was the big element on steel that was missing from the trade deal that they signed back at the G seven in Canada in a couple of months ago, and that still hasn't been resolved. We've now got a new Business and Trade Secretary in the UK and I know that the government is pretty desperate to get that sorted. Whether that will happen at next week's state visit, I think that, you know, I'm not hearing much optimism on that.
The briefings are more around a kind of agreement on quantum or AI or tech, some kind of deal in those areas, and there's been reports that various tech billionaires are coming over with Trump to join him in the state banquet as well. So I think the focus will be on that dangers.
What are the dangers in this state visit? It lasts several days. I mean we're expecting some level of protest by some groups in the UK and also there it's a double edged sword, the relationship, a close relationship with President Trump. We've seen some global leaders humiliated. I suppose one of the pitfalls people are thinking about.
There are actually a lot of dangers, and the government officials I've been speaking to who have been involved in the planning for the state visit are really really worried about it. The primary thing is that just days after Trump departs, the government is expected to recognize the state
of Palestine at the United Nations Assembly. Apro the the UK US approach to Israel is one of the big opposing differences, and the US administration, including Marco Rubio, have very much condemned the UK and France's and Canada's plan to recognize Palestine. So that will be you know, a moment of peril potentially if that's brought up. I mean. The other thing is Trump Trump isn't afraid to insult
various political allies of the Prime Minister. I mean even in Scotland he was asked about London Mercedy Khan and made very disparaging remarks which Kis Starma had to interrupt and remind the President that he was a friend and political ally of Kastarmer's. And there are other elements as well, on free speech, for example, this is something that jd Vance has has lectured and tried to score the UK on Trump's vice president also, So there are these political differences.
And the Prime Minister and the President will be giving a joint press conference at the end where they'll be probed on some of those issues as well.
And do you expect Nigel Farage or Reform UK to feature at all?
You know Farage he might get brought up in that press conference. For example, Forage to go over to the over Office and get and meet President Trump just a couple of weeks ago and got his picture standing next to the President at his desk. You know they are close political allies and Trump isn't you know? It is an embarrassed or about the lack of diplomacy that comes with saying that in front of the Prime Minister sometimes. So I would be surprised if he doesn't know.
And so what do you think is the best outcome for the UK? Just as we think about this opportunity, I suppose what do you think will be the images that emerge? I mean, could it be from let's say the first Lady Milania Trump, who's got her own visit with the Queen Camilla. I wonder what you think will emerge out of the next few days.
I think this state visit is going to be one of images they want to emerge in one of images they very much don't want to emerge. They are intentionally avoiding the President giving an address to the UK Parliament as typically happens. Mccrong gave his own address to the Parliament when he did his state visit earlier this year. I think that's to avoid the President trying to school politicians on their political differences, but also to avoid a
major protest outside outside Parliament. They're still expecting protests, there's talks, there's lots of reports about the heightened security in Windsor, so it will be one Kisdama will want to avoid any of those kind of era clashes that are at risk, and he'll want to get those deals, as I said, potentially on steal, on tech and also to just the King will want to give Trump a really good time, charm him, shower him with the pageantry that comes with spending time with the royal family.
That was Bloomberg's political correspondent Ellen Milligan looking at this second state visit from President Trump. In the coming few days, we'll have full coverage of this historic event, the visit to Windsor and more across Bloomberg platforms. I'm Caroline Hepkee here in London. You can catch us every weekday morning for Bloomberg Daybreak Europe, beginning at six am in London. That's one am on Wall Street. Tom.
Thank you, Caroline, And coming up on Bloomberg day Break weekend and meeting this week at the Bank of Japan. We'll discuss what that means from monetary policy there. That's up next. I'm Tom Busby, and this is Bloomberg. This is Bloomberg day Break Weekend, our global look ahead at the top stories for investors in the coming week. I'm
Tom Busby in New York. Policymakers at the Bank of Japan convening this week, and most BOJ watchers expect a lift to the benchmark interest rate by January, though some surveyed by Bloomberg se October as the most likely time given amplified political uncertainty. For more, let's get to the host of the Daybreak Asia podcast, Doug Krisner.
Tom Japan is now confronting a major shift in the outlook for politics and government policy. The country will soon get a new prime minister following the resignation of Shiguru Ishiba. For a closer look at the terrain in Japan four markets. I'm joined by Mia Glass. She is Japan FX and rates reporter for Bloomberg News. Mia joins us from our studios in Tokyo. Mia, thank you so much for joining me.
I think it's fair to say that the BOJ is known for being an especially cautious central bank, and I'm wondering whether you think it's likely that we're going to get any change in monetary policy in the coming week, right.
Thank you so much for having me. So for the BOJ meeting next week, I don't think there's any chance of a great hike. I think it's pretty widely expected that there will be no hike at this meeting. But just to set the stage, the Bank of Japan hasn't hiked since January. There was a lot of tariff uncertainty since April, and now there's a lot of political uncertainty after Prime Minister Ishiba announced that he's going to step down.
So we have meetings in September, October, and December still of this year, and although there won't be a hike next week, there's still a possibility that the BOJ could hike this year. And we actually had a Bloomberg story this week saying that Bank of Japan officials have the view that it might be possible to raise the interest rate again this year, regardless of the domestic political instability, and that really has to do with the fact that
economic data has been really in line with xpectations. So although there is still that uncertainty from the US trade deal and the political uncertainty in Japan, BOJ officials do think that there could still be a hike this year. And we had a survey as well that came out that said that most BOJ watchers expect a hike by January,
and October is still the most popular timing. It's the proportion of people who expect October tick down a little bit because of the political uncertainty, but October is definitely still a possibility.
So we know Japan will have a new prime minister soon now that Chiguru Ishiba has resigned. It seems as though high inflation on a relative basis was a big factor in this. Give me a sense of how inflation in Japan has been behaving.
Yeah, so, Japan's inflation has stayed at or above the boj's two percent target for more than three years now, and we even had US Treasury Secretary Scott Bessen said that the BOJ is kind of falling behind the curve and tackling inflation, and that has also been a lot of the reason why JGB yields, particularly on the longer end,
are rising so much recently. So that was definitely a part of why Ishiba had such a terrible election in July and another reason why we had he had to step down, And so that will definitely be part of the Bank of Japan's mission to tackle inflation and to bring those JGB yields down. So it'll definitely be important to watch to see how the Bank of Japan is going to signal next week about their great hike path.
You mentioned jgb's a moment ago, and I know we have an auction of twenty year jgb's coming up in the week ahead. I'm curious, is there a way to gauge right now what the market appetite may be.
Yeah, So recently we've been having better auctions than we have in the past. So a lot of this attention on auctions really started back in May when we had a really bad twenty year auction, the worst Aman in more than a decade, and it really sent global yields higher. So basically since then, there's been a lot of attention
on these auctions, and particularly in the longer end. This is going to be the first super long bond auction since Prime Minister Ishiba announced his plan to step down, and with all a concern in the bond market about fiscal policy and political uncertainty, it's going to be really important to watch that twenty year auction and see if there is demand there to gauge how the bond market is feeling about the political situation.
Talk to me a little bit about this new chapter in Japanese politics and what it may mean for the way in which the Bank of Japan operates going forward.
Yeah, So the leadership election for the LDP is set for October fourth, which is kind of a tricky timing for the BOJ. I mean, they have their next after September. Their next meeting is going to be in October, so it's really tricky timing for the BOJ and it really depends on who becomes the new prime minister. So we're looking at a couple leading contenders. So we have Sanai a Takaichi, who favors stimulus measures and would also likely prefer the BOJ to take a more cautious view on
rate hikes. And then Shinjio Koizumi, he's another potential candidate, but he would most likely just continue with the current administration's views and he would support raising interest rates. So depending on who comes into office, we could have a drastic change. And you know how the BOJ operates. So I think the political situation would be really important to watch. And as you mentioned, globally, this is a really important
time to be watching politics for the bomb market. We have political turmoil in France, and then in the US we also have concerns about the Fed's independence. We also have the tax cut and spending your bill, so that's sending globally Longa Mountains higher. So it's not really just a problem in Japan. It's happening all around the world.
Okay, Miya, Before I let you go, talk to me a little bit about how tariffs that were put in place by the Trump administration, how they have been impacting the Japanese economy.
Right, So President Trump signed an executive order implementing the trade agreement with Pan and that's a maximum fifteen percent tariff on most of its products that includes automobiles parts, and so the deal also includes this promise that Japan will create a five hundred and fifty billion dollar US investment fund. But there's a bit of a disconnect between what Trump thinks of that investment fund versus what Japan
thinks of it. So Trump has previously said that that five hundred and fifty billion dollar investment fund will be money that his administration could invest as they like, with ninety percent of the profits being given to the US by Japan versus Japan kind of sees it as more of a combination of investments and loans and loan guarantees. So there's a bit of a disconnect there, and the market is really uncertain uncertain about how that's going to
play out. And of course, if that really is how Trump's saying it's going to be, then that's going to impact the economy, that's going to weaken the yen. So it'll be really important still to watch how that plays out.
There's a lot of uncertainty there. The trade deal obviously also matters because Japan is really an export driven economy, so we've seen export value decline but volume has risen, which shows that a lot of carmakers have been cutting prices while maintaining the volume of their exports to the US, so they're sacrificing those profit margins. And the impact of the terraffs has been limited a bit on the GDP
of Japan. So Japan's economy is still growing. But I think a lot of economists are saying that we could still see the impact from Terra's play out on Japan. So that'll be an important area to watch for the BOJ as well.
Okay, Mia, thank you so much. We'll leave it there as we look ahead to the BOJ meeting next week. She is Mia Glass, Japan FX and rates reporter for Bloomberg News, joining us from our studios in Tokyo. Staying in Japan. We turn next to politics and the resignation of Shigeru Ishiba. This came after back to back losses that cost his Liberal Democratic Party it's parliamentary majority. Now in a column published last week Bloomberg Opinions, Garode ready
characterized Ishiba's assent as a gamble. I had the chance to speak with Garod and began by asking him whether Ishiba's resignation came as a surprise.
I think the only thing that was surprising about it was how long it took. Its seven or eight weeks since the upper House election defeat that, as you say, is the second majors we indeed the third major defeat that Ishiba had as LDP leader, in addition to the lower house defeat last year and the Tokyo a smble the election earlier this year. As you know, as you say, Ishiba was Ishiba was brought in to fix a problem, and the problem was the LDP's declining popularity that was
under the previous Prime Minister of Fumio Kishida. Ishiba was brought in as a new face, new lick of paint on the party. He wasn't tainted by any of the scandals, nor should I say, actually it was Kishidabakishida was the one who was sort of like handling them, so he kind of became associated with them. Ishiba was quite scandal free,
clean politician, believed to be popular. But when he came in, he did not see the actual bounce in approval ratings that we would associate with a new leader coming in, and ultimately, you know, the LDP is a large organization, and what they are there to do is to is to win elections, and what the leader is there to do is to win elections. Ishiba proved that he couldn't do that, and as I say, the only surprising thing
is that he didn't go earlier. He dragged it out a little bit longer than frankly I think it needed to.
Maybe you can help me understand the possible successors to Ishiba? Are there any obvious candidates?
The two leading candidates at the moment, I should say it's very early in the day. We had in memory serves nine candidates last year in the race that eventually was won by Ishiba. The two leading candidates would be the people who came second and third in that election last year. That's sanai A Takaichi and Shinjiro Koizumi Takeichi first.
If she became the leader and then was elected prime minister, it's you know, no quite likely, but no longer guarantee because the oldp is no longer the largest party in the lower house. She would become the first female prime minister in Japan. She is a self declared heir of Shinzo Abbe and his politics and his you know, Abinomics policies. She is we should say, yeah, she's definitely very popular with the right wing and especially with people who did
not like Ishiba. They really represent two polls on either side of the party, so she's definitely a leading candidate. I would say. She finished second in the runoff election against Ishiba last year, and what you saw was basically concerned that she might have rather similar flaws to what Ishiba turned out to have in that she only appeals maybe to one section of the party, and that in her case is the right wing. The other candidate, as
I mentioned, is Shinjiro Koizumi. He's the son of the former Prime Minister Janichiro Koizumi, who listeners might remember was Prime minister in the early to mid two thousands while George W. Bush was the president in the US. He's very young, he's a little inexperienced, but he has had
quite an impressive year. He came in as Agriculture minister early on this year to deal with the rice prices that I mentioned earlier, and very immediately and effectively was able to generate a downturn in rice prices by chaining how the country was releasing its reserves of rice that will have certainly one of some plaudits. He's believed to be quite popular with the public. He's young, he's good looking,
he's charismatic. He has a celebrity wife and a young family, so he has a lot of things going for him. Those would be the two leading candidates I think at the moment.
That is Bloomberg opinion columnist Gerode Ready and I'm Doug Chrisner. Catch us weekdays for the Daybreak Asia podcast. It's available wherever you get your podcast.
Tom, Thank you Doug. And that does it for this edition of Bloomberg day Break Weekend. Join us again Monday morning at five am Wall Street Time for the latest on markets overseas, in the news you need to start your day. I'm Tom Busby. Stay with us. Top stories and global business headlines are coming up right now.