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Japan’s ruling coalition loses majority, election results in balance
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Japan’s ruling coalition loses majority, election results in balance

JAPAN’s ruling coalition lost its parliamentary majority in national elections on Sunday, raising uncertainty over the make-up of the next government and the outlook for the world’s fourth-largest economy.

With all but 20 of the 465 seats up for grabs, Prime Minister Shigeru Ishiba’s Liberal Democratic Party (LDP), which has led Japan for most of its post-war history, and junior coalition partner Komeito took 209 seats in the lower house of parliament. , public broadcaster NHK reported.

This was down from the 279 seats it previously held and marked the coalition’s worst electoral result since it briefly lost power in 2009.

“This election was very tough for us,” a somber-looking Ishiba told TV Tokyo.

Komeito’s Keiichi Ishii, who took over as the party’s new leader last month, lost in his district.

The biggest winner of the night, the main opposition Constitutional Democratic Party of Japan (CDPJ), has so far held 143 seats, up from 98 previously, as voters punished Ishiba’s party over a funding scandal and inflation.

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The outcome could force the parties into power-sharing deals to govern, potentially leading to political instability as the country faces economic headwinds and a tense security situation in East Asia.

“This is not the end, but the beginning,” CDPJ leader Yoshihiko Noda told a news conference, adding that his party would work with other opposition parties to pursue a government change.

Ishiba said he would wait until the final results, likely on Monday, before considering potential coalitions or other power-sharing arrangements.

The prime minister called for the snap poll immediately after being elected to lead the party last month, hoping to win a public mandate for prime minister.

His predecessor, Fumio Kishida, resigned after his support collapsed amid anger over the cost-of-living crisis and a scandal involving unregistered donations to lawmakers.

The election also came nine days before voters in the United States – Japan’s closest ally – head to the polls in another unpredictable election.

Political affairs, commotion in the market

Japanese stocks and the yen are expected to fall, while yields on longer-dated government bonds are seen rising as investors react to uncertainty.

“Voters’ decision on the ruling bloc was tougher than expected,” said Saisuke Sakai, senior economist at Mizuho Research and Technologies.

“Uncertainty about the continuity of the administration has increased and the stock market will react with a sell-off tomorrow, especially among foreign investors.”

The PLD has held an outright majority since returning to power in 2012 after a brief period of opposition rule. It also briefly lost power in 1993 when a coalition of seven opposition parties formed a government that lasted less than a year.

Smaller parties such as the Democratic People’s Party (DPP) or Japan’s Innovation Party could now prove key to forming a government.

The DPP has so far held 27 seats and the Japan Innovation Party 35 seats, according to NHK. But both propose policies at odds with the LDP line.

DPP chief Yuichiro Tamaki did not rule out some cooperation with the PDL-led coalition, but Innovation Party chief Nobuyuki Baba rejected the idea.

The DPP is calling for Japan’s 10 percent sales tax to be halved until real wages rise, a policy disapproved of by the LDP, while the Innovation Party has promised stricter rules on donations to clean up politics.

“The DPP is ultimately focused on improving the country and making sure financial resources are allocated more appropriately, so that’s why I decided to vote for them,” said Keisuke Yoshitomi, a 39-year-old office worker. after casting his vote at a polling station in Tokyo.

The political wrangling could also be a headache for the Bank of Japan (BOJ) if Ishiba chooses a partner who favors keeping interest rates close to zero when the central bank wants to raise them gradually.

The Innovation Party opposes further interest rate hikes, and the DPP leader said the BOJ may have rushed to raise rates as the central bank wants to phase Japan out of decades of massive monetary stimulus.

“With a more fluid political landscape, advancing economic policies that include tax increases, such as funding defense spending, will become much more difficult,” said Masafumi Fujihara, an associate professor of politics at Yamanashi University.

“Without a strong government, it would be more difficult for the BOJ to raise rates and keep the weak yen in check.” Reuters