Japan’s parliament formally elected Shigeru Ishiba, head of the governing Liberal Democratic Party, as the country’s new prime minister.

Stocks dropped after Japan’s governing party chose Shigeru Ishiba, a critic of the country’s longstanding ultralow interest rates, as its leader.

The person chosen to lead Japan’s governing party, and become prime minister next week, is a veteran politician with deep policy experience, a taste for curry and anime — and big challenges ahead of h