How Japan faces political upheaval after LDP loses majority for first time in 15 years

Japanese elections are usually staid affairs. However, the snap polls called by Prime Minister Shigeru Ishiba on October 27 were no boring affair. It has, in fact, shaken up Japanese politics with the ruling Liberal Democratic Party (LDP) losing its majority for the first time in 15 years.

The election results put Japanese Prime Minister Shigeru Ishiba on thin ice, with the PM being quoted as saying, “We are receiving severe judgement.”

In a 456-member lower house, NHK tallies put the LDP winning 191 seats whereas its ally, the Komeito, won 24 seats. This means their total tally is 215. This tally is far behind Ishiba’s election goal of winning 233 seats. Moreover, it is way behind its 2021 tally where it won a majority in its own right, with 259 seats and the Komeito securing 32.

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As the LDP grapples with this loss, we take a closer look at what exactly unfolded in this election — from why the LDP failed to secure a majority to what happens next.

Worst result in 15 years

The Sunday elections in Japan called by Prime Minister Shigeru Ishiba shortly after he won the party’s leadership contest last month has dealt a huge blow to the LDP, which has been the most powerful and dominant party in the country.

Earlier footage from the LDP headquarters showed gloomy faces as projections showed that Ishiba’s justice and agriculture ministers were likely to lose their seats.

The last time the LDP lost at the polls was in 2009 when it was replaced for three years by the centre-left Democratic Party of Japan. However, the DPJ’s policy failures and its poor response to the 2011 Fukushima nuclear disaster allowed the LDP under Shinzo Abe to return to power in late 2012.

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Following Sunday’s poor showing, Ishiba told NHK, “Voters have handed us a harsh verdict and we have to humbly accept this result.”

While the polls have been rough for the LDP, the biggest winner of the night has been the main opposition Constitutional Democratic Party of Japan (CDPJ). It has secured 148 seats, up from 98 previously, but is also still well short of the 233 majority.

Reasons for LDP’s drubbing

The results on Sunday do not come as an absolute surprise. The LDP has been losing its popularity for a while and has been dogged by a cascade of scandals. The party had seen approval ratings of below 20 per cent earlier in the year.

The anger with the LDP came to a boil when the slush fund scandal became known in 2023. It was then reported that a number of LDP lawmakers had siphoned unreported profits from the sale of tickets to party gatherings into slush funds. This led to former Japanese PM Fumio Kishida to step down in October, paving the way for Ishiba.

When Ishiba took charge of the LDP, his initial ratings were positive. However, days before the vote, a report emerged that the party had provided campaign funds to branches headed by non-endorsed candidates. The story was picked up widely by Japanese media despite Ishiba saying the money could not be used by non-endorsed candidates. “LDP’s payments to branches show utter lack of care for public image,” ran an editorial in the influential Asahi newspaper two days before the polls.

Japan’s economy and the cost of living crisis haven’t helped either. Many in Japan have been complaining of their struggle with inflation, high prices, stagnant wages and a sluggish economy.

**What next for LDP and Japan
**

Shortly after the results started coming in, the yen dipped in the market. In currency trading, the US dollar rose to 153.76 Japanese yen from 152.24 yen. It was trading at 140-yen levels last month.

For Ishiba, the results are a dilemma. To stay in power, the LDP will need to form a coalition with parties it fought against in the polls. That means it must enter negotiations and discussions on power-sharing deals, which could result in political instability. It is reported that Ishiba will hold a press conference at 2 pm local time.

For the LDP, the Democratic Party for the People (DPP) or the Japan Innovation Party will hold the key to the future. The DPP has secured 27 seats while the Japan Innovation Party has 35 seats. However, both these parties’ policies are at odds with the LDP.

The Japan Innovation Party’s head Nobuyuki Baba has dismissed a tie-up with the LDP in its current scandal-tainted state as “impossible”. The DPP has also denied tying up with the LDP. However, its leader, Yuichiro Tamaki, has hinted that a “partial coalition” is possible where it can offer some flexibility on individual policies it has an affinity with.

David Roche, a strategist at Quantum Strategy, told CNBC that Ishiba is now a “dead man walking” with his Liberal Democratic Party “very likely to lose power completely or see its power very diluted in a messy coalition after an even messier protracted period of haggling.”

“What is sure is that policy uncertainty will rule while the haggling goes on,” he said in a flash research note Sunday night, predicting the yen to weaken from here.

On the other hand, the Constitutional Democratic Party of Japan (CDPJ) is also attempting government formation. CDPJ leader Yoshihiko Noda told the press, “Our goal was to break the ruling party’s majority, and we achieved it, which is a great accomplishment.”

He added that he would hold “sincere talks with various parties”. “Our basic philosophy is that the LDP-Komeito administration cannot continue,” Noda told Fuji-TV.

As mandated by the constitution, parties now have 30 days to figure out a grouping that can govern. While the immediate future of Japan remains uncertain, one thing is certain: the country is witnessing political instability. This unsteadiness is not only dangerous for Japan but also for its neighbours, allies and the region.

With inputs from agencies