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Markets Magazine

A Quiet Ex-Banker Shocks Markets With ‘Socialist’ Tilt in Japan

Prime Minister Fumio Kishida has unnerved investors with talk of a ‘new capitalism’ to address income inequality. How far will he go?

Japan Tilts Left HP

Illustration: Simoul Alva for Bloomberg Markets

When Fumio Kishida became Japan’s 100th prime minister, the low-key former banker was the ruling party’s most ­moderate—even boring—­candidate. But in financial markets he delivered a shock.

Kishida, who’s highlighted the problem of growing income disparities for years, panicked investors in October, during the week of his inauguration, with talk of redistributing wealth and raising wages and ­capital- gains taxes. “Kishida Shock” trended on Twitter. The Nikkei 225 Stock Average posted its longest losing streak in more than a decade. Although he backed away from the tax idea, Kishida continues to promote a “new form of capitalism” that he says will address inequality and climate change.