With Shinzo Abe stepping down, whoever succeeds Japan’s longest-serving prime minister will be sure to face daunting economic challenges.
Markets will be keen to see if the next administration will stick to Abenomics, his namesake economic program consisting of aggressive monetary easing, flexible fiscal spending and structural reform.
While the names of potential candidates have been floated, economists say Japan's next leader will likely maintain the basic Abenomics framework. Since Abe's program was sustained by nearly eight years of political stability, it will be crucial for the next prime minister to send clear messages of continuity to avoid surprising financial markets, which are sensitive to uncertainty.