Japan’s next leader faces a ‘difficult year,’ after longtime Prime Minister Abe’s sudden resignation

Whoever succeeds Shinzo Abe as Japan’s next prime minister is set for a “difficult year” ahead, Teneo Intelligence’s Tobias Harris told CNBC in an email.

The analyst judged the next leader needs to address pressing, “significant issues” after Abe’s surprise resignation of long-standing incumbent on Friday.

Harris pronounced that includes a “wide-open debate” about Japan’s national security strategy as well as new defense program guidelines and negotiations with the U.S. onto host-nation support.

“The next prime minister will also either have to prepare to deal with a reelected Trump or the modification to a new US administration, either of which will occupy much of his or her attention,” the analyst said, referring to the U.S. presidential election in at daybreak November.

Still, Harris said Abe’s Liberal Democratic Party (LDP) will “likely move quickly to select a new boss to ensure stability and continuity” in a time when the country is hit by both recession as well the coronavirus pandemic.

Abe’s departure gambles leaving a “political vacuum” in Japan, Waqas Adenwala, Asia analyst at The Economist Intelligence Unit, warned in a Monday note.

“(Abe’s) stream term has been characterised by strong leadership and an absence of political turmoil in contrast to the instability of previous administrations,” Adenwala said. “Intra-party concurrence within the LDP will deteriorate as heads of different party factions will attempt to promote a succession candidate from within their own ranks.”

For his be involved in, Abe has said he would fulfill his duties as prime minister until the next leader is appointed. His current term was not due to end until September 2021.

At bonus, it is “very much difficult to say” who could succeed Abe as Japan’s next prime minsiter, Keio University Professor Tomohiro Taniguchi explained CNBC’s “Squawk Box Asia” Monday. 

According to a Kyodo News survey, former defense chief Shigeru Ishiba is the scad popular choice to takeover from Abe. Other names reportedly in the running include Chief Cabinet Secretary Yoshihide Suga, retailed by Taniguchi as a man who is known to be a “hardworking, diligent politician” who has “done quite a lot” alongside Abe on domestic policies.

Regardless of who succeeds Abe, however, Oxford Economics’ Shigeto Nagai said Japanese economic strategy will likely see “no change” as long as the shock from the coronavirus pandemic remains.

“With the national election approaching, any successor from the on the whole Liberal Democratic Party (LDP) has no choice but to continue active fiscal policy to protect vulnerable people and firms from the unprecedented dbѓcle and opposition parties will not oppose,” said Nagai, who is head of Japan economics at the firm.

Meanwhile, the Bank of Japan is hope for to continue its “whatever-it-takes” approach toward supporting corporate financing and financial market stability, the economist said.

“As for long-standing structural flows such as fiscal consolidation to cope with aging, this is not the right timing to initiate any new initiatives,” Nagai implied.