Japan’s Prime Minister Shinzo Abe announced he will resign over health problems. (AFP)

Prime Minister Shinzo Abe, Japan’s longest-serving premier, announced his resignation because of poor health on Friday, ending a stint at the helm of the world’s third-biggest economy in which he sought to revive growth and bolster its defences.

“I have decided that I will step down as prime minister, with the belief that I cannot continue being prime minister if I do not have the confidence that I can carry out the job entrusted to me by the people,” Abe, 65, told a news conference.

He said he had decided to step down now to avoid a political vacuum as the country copes with its novel coronavirus outbreak.

“I apologize from the bottom of my heart that despite all of the support from the Japanese people, I am leaving the post with one full year left in my term and in the midst of various policies and coronavirus,” Abe said. He similarly quit in 2007 after one year as premier, citing illness.

It was the second time Abe has resigned as prime minister because of poor health.

He has battled the disease ulcerative colitis for years and two recent hospital visits within a week had fanned questions on whether he could stay in the job until the end of his term as ruling party leader, and hence, premier, in September 2021.

As news of the resignation spread, Japan’s benchmark Nikkei average fell 2.12% to 22,717.02, while the broader Topix shed 1.00% to 1,599.70.

The selling wiped $47 billion off Tokyo’s $5.7 trillion stock market value, which had more than doubled during Abe’s tenure.

The resignation will trigger a leadership race in the ruling Liberal Democratic Party (LDP) – most likely in two or three weeks – and the winner must be formally elected in parliament. The new party leader will hold the post for the rest of Abe’s term.

Former defence minister Shigeru Ishiba and former foreign minister Fumio Kishida both quickly expressed interest in the top job, media reported. Among others whose names have been floated is Abe’s close aide, Chief Cabinet Secretary Yoshihide Suga.

Whoever wins the party poll is likely to keep Abe’s reflationary “Abenomics” policies as Japan struggles with the impact of the novel coronavirus, but may have trouble emulating the political longevity that may be Abe’s biggest legacy.

“The broad picture remains in tact. In terms of economic and fiscal policy, the focus remains very much on reflation,” said Jesper Koll, senior adviser to asset manager WisdomTree Investments. “Longevity will be a struggle.”

On Monday, Abe surpassed a record for longest consecutive tenure as premier set by his great-uncle Eisaku Sato half a century ago.

“As head of the ruling party he worked hard on Abenomics for eight years,” said Naohito Kojima, 55, a brokerage employee.

“There were various problems but if someone else had been leader, it’s questionable whether they could have maintained a stable government as long as Mr Abe. He did various diplomatic negotiations and I think the pros outweighed the cons.”

Abe’s resignation also comes amid an uncertain geopolitical environment, including an intensifying confrontation between the United States and China and ahead of the U.S. presidential election in November

Reuters