Embattled Japanese Prime Minister Shigeru Ishiba has resigned, ushering in a potentially lengthy period of policy paralysis at a shaky moment for the world's fourth-largest economy.

Ishiba, 68, announced his decision at a press conference on Sunday.

Since the former defence minister came to power less than a year ago, his coalition has lost its majorities in elections for both houses of parliament amid voter anger over rising living costs.

He had refused calls from within his Liberal Democratic Party - which has ruled Japan for almost all of the post-war era - to step down and take responsibility for the upper house loss in July.

Instead, he has focused on trying to iron out the final details of a deal with the United States on trade tariffs that have roiled Japan's critical automotive

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