TOKYO – Japanese Prime Minister Yoshihide Suga said on Friday he would step down, setting the stage for a new premier after a one-year tenure marred by an unpopular COVID-19 response and rapidly dwindling public support.

Mr. Suga, who took over after Shinzo Abe resigned last September citing ill health, has seen his support ratings sink below 30% as the nation struggles with its worst wave of COVID-19 infections ahead of a general election this year.

Suga did not capitalise on his last major achievement – hosting the Olympics, which were postponed months before Suga took office as coronavirus cases surged.

His decision not to seek reelection as ruling Liberal Democratic Party (LDP) election this month means the party will choose a new leader, who will become prime minister.

There is no clear frontrunner, but the popular minister in charge of vaccination rollout, Taro Kono, intends to run, broadcaster TBS said on Friday without citing sources. Former foreign minister Fumio Kishida has already thrown his hat in the ring.

Before Abe’s record eight-year tenure, the country had gone through six prime ministers in as many years, including Abe’s own troubled first one-year term.

Tokyo stocks jumped on news of Suga‘s decision, with the benchmark Nikkei rising 2% and the broader Topix hitting its highest levels since 1991.

“I want to focus on coronavirus response, so I told the LDP executive meeting that I’ve decided not to run in the party leadership race,” Suga told reporters. “I judged that I cannot juggle both and I should concentrate on either of them.”

He said he would hold a news conference as early as next week.

The announcement ended a rollercoaster week in which Suga pulled out all the stops to save his job, including suggestions he would sack his long-term party ally, as well as plans to dissolve parliament and reshuffle party executive and his cabinet.

Suga is expected to stay on until his successor is chosen in the party election slated for Sept. 29. The winner is assured of being premier due to the LDP’s majority in the lower house of parliament. The government has been considering holding the general election on Oct. 17.

RACE FOR LEADER

Rival Kishida, a soft-spoken Hiroshima lawmaker, on Thursday criticised Suga‘s coronavirus response and urged a stimulus package to combat the pandemic.

“Kishida is the top runner for the time being but that doesn’t mean his victory is assured,” said Koichi Nakano, political science professor at Sophia University.

Nakano said Kono, Suga‘s administrative reform minister, could run if he gets the backing of his faction leader, Finance Minister Taro Aso.

Former defence minister Shigeru Ishiba, also popular with the public as a potential premier, said he was ready to run if the conditions and environment are right. He was a rare LDP critic of Abe during his time as prime minister.

Kono has led Japan‘s rocky inoculation drive but remains high on the list of lawmakers voters want to see succeed Suga. He has not commented on the report that he plans to run.

A former foreign and defence minister, Kono, 56, is popular with younger voters after building support through Twitter, where he has 2.3 million followers – a rarity in Japanese politics dominated by men in their 60s or older.

Abe’s stance will be closely watched given his influence inside the two largest factions of the LDP and among conservative MPs, experts say.

The LDP-led coalition is not expected to lose its majority in the lower house, but forecasts suggest that the LDP could lose the majority that it holds on its own, an outcome that would weaken whoever leads the party next.

“Stock prices are rising based on a view that the chance of LDP’s defeat in the general election has diminished because anyone other than Suga will be able to regain popularity,” said senior economist at Daiwa Securities Toru Suehiro.

Suga‘s image as a savvy political operator capable of pushing through reforms and taking on the stodgy bureaucracy propelled his support to 74 percent when he took office.

He initially won applause for populist promises such as lower mobile phone rates and insurance for fertility treatments. But removing scholars critical of the government from an advisory panel and compromising with a junior coalition partner on policy for healthcare costs for the elderly drew criticism.

His delay in halting a domestic travel programme – which experts say may have helped spread coronavirus around Japan – hit hard, while the public grew weary of states of emergency that hurt businesses. – Reuters

WASHINGTON – The Biden administration has no plans to release billions in Afghan gold, investments and foreign currency reserves parked in the United States that it froze after the Taliban’s takeover, despite pressure from humanitarian groups and others who say the cost may be the collapse of Afghanistan’s economy.

Much of the Afghan central bank’s $10 billion in assets are parked overseas, where they are considered a key instrument for the West to pressure the Taliban to respect women’s rights and the rule of law.

Any unfreezing of these assets may be months away, financial experts said.

Officials from the U.S. State Department, U.S. Treasury, White House National Security Council and other agencies have been in regular discussions about Afghanistan’s finances since the Taliban took over in mid-August, ahead of what the United Nations and others see as a looming humanitarian crisis.

Any decision to release the funds would likely involve top U.S. officials from several departments but will ultimately be up to President Joe Biden, the experts said.

Food and fuel prices are soaring across Afghanistan, amid a shortage of cash triggered by a halt in foreign aid, a halt in dollar shipments and a drought.

The U.S. Treasury this week said it had granted a license authorizing the U.S. government and its partners to continue to facilitate humanitarian aid in Afghanistan. It also gave Western Union, the world’s largest money transfer firm, and other financial institutions a green light to resume processing personal remittances to Afghanistan from migrants overseas.

The Treasury Department is not easing sanctions on the Taliban or loosening restrictions on their access to the global financial system, a spokesperson told Reuters.

“The United States government has been in touch with humanitarian partners in Afghanistan, both regarding security conditions on the ground and about their ability to continue their humanitarian work,” the spokesperson said.

“As we maintain our commitment to the Afghan people, we have not reduced sanctions pressure on Taliban leaders or the significant restrictions on their access to the international financial system.”

Shah Mehrabi, an economics professor in Maryland and long-time member of the Afghan central bank’s board, a senior Russian official and humanitarian groups are among those urging the U.S. Treasury to also unfreeze the Afghan assets, saying that lives are at stake.

“The gravity of the situation is so immense. Every day that passes is going to result in more suffering and more exodus of people,” Mr. Mehrabi said.

The International Monetary Fund has also blocked the Taliban from accessing some $440 million in new emergency reserves, or Special Drawing Rights, issued by the global lender last month.

Adnan Mazarei, former deputy director of the IMF and now a fellow at the Peterson Institute for International Economics, said the United States could not legally release the Afghan assets until there was an internationally recognized government, and that could take many months to occur. The IMF could not act until its board voted, once a government was recognized.

He said a central bank’s reserves are typically not touched except as a last resort. Even Iran, struggling under intense international sanctions, has not used its IMF emergency reserves, he said.

Brian O’Toole, a former Treasury Department official now with the Atlantic Council, said a release of the Afghan assets would not solve Afghanistan’s considerable problems.

“Just releasing those funds doesn’t stabilize the Afghan economy, or do anything like that. What it does is give the Taliban access” to billions of dollars, he said. “I don’t think there’s gonna be a lot of appetite in the U.S. to do that, nor should there be.” – Reuters