His party lost its majority in the lower house during snap elections in November 2024, and a LDP-led coalition also failed to secure a majority in the upper house elections this past July.
The Liberal Democratic Party has been gripped by a scandal over the misuse of campaign funds since 2023.
In July, Japan reached a trade deal with the U.S., which was signed into effect by U.S. President Donald Trump on Thursday. Under the agreement, the U.S. imposes 15 percent tariffs on most goods, and Japan pledges to invest $550 billion into the U.S.
Ishiba cited the completion of the trade deal with the U.S. as a reason for him to step down and not run in an upcoming leadership contest of the Liberal Democratic Party.
