Japan’s ruling coalition likely to lose Upper House control, exit polls show

[TOKYO] Japan’s ruling coalition is likely to lose its majority in the Upper House, an exit poll for Sunday’s (Jul 20) election showed, potentially fuelling political instability in the world’s fourth-largest economy as a tariff deadline with the United States looms.

While the ballot does not directly determine whether Prime Minister Shigeru Ishiba’s shaky minority government falls, it heaps pressure on the embattled leader who also lost control of the more-powerful Lower House in October.

Ishiba’s Liberal Democratic Party (LDP) and coalition partner Komeito needed 50 seats to retain control of the 248-seat upper chamber in an election where half the seats are up for grabs. They are forecast to secure 32 to 51 seats, the exit poll by public broadcaster NHK showed.

Other broadcasters forecast the ruling coalition would hold 41-43 seats. If the coalition holds fewer than 46 seats, it would mark its worst result since the coalition was formed in 1999.

That comes on top of its worst showing in 15 years in October’s Lower House election. That has left Ishiba vulnerable to no-confidence motions that could topple his administration and trigger a fresh general election.

Ishiba, when asked by a reporter if he intends to stay as a prime minister and the ruling party leader, said “that’s right”, during a joint press interview at the party’s headquarters in Tokyo as vote counts continued.

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“We are engaged in extremely critical tariff negotiations with the United States...we must never ruin these negotiations,” Ishiba added.

Opposition parties advocating for tax cuts and increased welfare spending look set to make gains, the exit polls show, with rising consumer prices – particularly a jump in the cost of the staple rice – a key issue for voters.

“The LDP was largely playing defence in this election, being on the wrong side of a key voter issue,” said David Boling, a director at consulting firm Eurasia Group.

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“Polls show that most households want a cut to the consumption tax to address inflation, something that the LDP opposes. Opposition parties seized on it and hammered that message home.”

The LDP have been urging for fiscal restraint, with one eye on a very jittery government bond market, as investors worry about Japan’s ability to refinance the world’s largest debt pile.

Adding to the anxiety around the world’s fourth-largest economy, Japan faces a deadline of Aug 1 to strike a trade deal with the US or face punishing tariffs in its largest export market.

The main opposition Constitutional Democratic Party is projected to win 18 to 30 seats, from 22 held previously, NHK’s exit poll showed.

The populist Sanseito party looked to be one of the big winners on the night, forecast to win 10-15 seats in the chamber, up from just one held previously.

Sanseito’s “Japanese First” campaign and warnings about a “silent invasion” of foreigners, have dragged once-fringe political rhetoric into the mainstream.