Japan’s Liberal Democratic Party (LDP) led by Prime Minister Shigeru Ishiba saw its seat count fall from 247 to 191, well below the 233 seats needed for a majority in the House of Representatives election on October 27. The LDP’s coalition partner, Komeito, also saw its seats decline from 32 to 24. As a result, the LDP-Komeito coalition secured a total of 215 seats, significantly below the majority required in the House of Representatives. Meanwhile, the Constitutional Democratic Party of Japan (CDP), led by former Prime Minister Yoshihiko Noda, made a significant gain, increasing its seats from 98 to 148. The Democratic Party for the People (DPP), which shares roots with the former Democratic Party, also saw a notable rise, growing its seats from 7 to 28.

With the LDP-Komeito coalition falling well short of a majority, the political focus now shifts to the upcoming extraordinary Diet session in early November, where the prime minister will be elected. The prime minister is chosen by both the House of Representatives and the House of Councillors, but if the two houses disagree, the decision of the House of Representatives takes precedence. While the LDP-Komeito coalition holds a majority in the House of Councillors, the coalition could face the first change of government since 2012, if the opposition parties in the lower house manage to unite behind Yoshihiko Noda. In response, the LDP is also moving to secure a majority through larger coalition-building efforts.

The formation of the new government will have a major impact on the direction and speed of Japan’s economic policies, so businesses should closely monitor political developments. BGA will continue to provide timely updates and analysis as the situation unfolds.

WHAT YOU NEED TO KNOW:

  • The Japanese House of Representatives election was a contest for 465 seats: 289 were elected from single-member districts and 176 through proportional representation across 11 regions. The prime minister is chosen from the party or coalition that secures a majority of 233 seats. Before the general election, the LDP held a single-party majority, and together with its coalition partner Komeito, the grouping controlled all 17 standing committees, holding what is known as an “absolute stable majority.” However, this time, even the combined strength of the LDP and Komeito left the coalition 18 seats short of the majority, facing a challenging result.
  • This election was held just 27 days after the inauguration of Prime Minister Shigeru Ishiba’s new Cabinet. Typically, a newly appointed prime minister enjoys a honeymoon period of public support, launching his administration with high approval ratings. Dissolving the House of Representatives and holding a general election early in the term is often advantageous, as seen in former Prime Minister Fumio Kishida’s successful strategy three years ago. The Ishiba Cabinet’s approval rating at its start was 51 percent (Nikkei), close to Kishida’s 54 percent when he took office. Additionally, in nearly 90 percent of the 289 single-member districts, opposition candidates were not unified, which was expected to split anti-LDP votes and give the LDP an advantage. As a result, when the Diet was dissolved, LDP leaders believed they could still achieve a single-party majority despite public criticism over political funding scandals since last year.
  • However, the outcome this time was starkly different. The first key factor that shifted the political landscape was Ishiba’s sudden policy reversal. During the LDP leadership election in September, Shinjiro Koizumi, the initial frontrunner for party leader, advocated for a quick dissolution of the house on assuming office as the new prime mnister. Ishiba, in contrast, criticized this approach, arguing that the Diet should first have time to debate policies and that a hasty election would not allow voters to properly evaluate the new administration. Yet just eight days after becoming prime minister, Ishiba dissolved the house in what became the fastest dissolution in postwar history. The opposition quickly condemned this as a ploy to distract the public from political scandals. Although Ishiba announced that “most of the 44 candidates with undisclosed political funds” would not receive official party endorsement, only ten were actually denied. Moreover, just a few days before the election, news reports revealed that the party had provided election funds to non-endorsed candidates, further eroding Ishiba’s credibility.
  • The focus now shifts to the political maneuvers in the coming weeks leading up to the extraordinary Diet session. The LDP will try to secure a majority by offering official endorsements to Koichi Hagiuda, Yasutoshi Nishimura and Katsuei Hirasawa, who were denied official party endorsements due to political funding scandals. At the same time, the LDP will try to incorporate conservative lawmakers such as Hiroshige Seko, who is currently outside the party, and independent lawmakers who defeated LDP candidates into the LDP parliamentary group. With these efforts, the coalition could gain about 10 seats, bringing the LDP-Komeito grouping closer to the 233-seat majority. Additionally, the LDP could potentially form a coalition or agreement with the Japan Innovation Party and the DPP, which share similar policy positions. DPP leader Yuichiro Tamaki told the media that he would be open to cooperation with the LDP and Komeito “if our policies align,” leaving room for a “partial coalition” based on issue-specific agreements. On the other side, Noda of the CDP will need to prevent the LDP from dividing the opposition, while working to unite with parties like the Japanese Communist Party, despite policy differences, to ensure a unified stance in the prime ministerial election.
  • If the LDP-Komeito coalition manages to secure a majority in the lower house, the political situation will likely stabilize for the time being, even though their policy autonomy would be more constrained compared to before the election. This would mark the first time the LDP has lost its majority in the House of Representatives since 2009. Since the 1990s, including during the popular Junichiro Koizumi administration, the LDP has faced extended periods in which the LDP did not hold a single-party majority. In these cases, as long as the LDP could maintain a majority through cooperation with other parties and avoid legislative gridlock between the two houses, the government could still function stably. Nevertheless, even in this scenario, the question of Ishiba’s responsibility as LDP president could arise. 
  • On the other hand, if the CDP successfully forms a majority and Noda becomes prime minister, the feasibility and reliability of policy agreements with parties that have significant ideological differences would be questioned. The administration would face the challenge of a divided Diet, with the House of Councillors controlled by the LDP-Komeito coalition. 

The CDP significantly increased its seats this time by capitalizing on the LDP’s political funding scandals. Key issues such as foreign and security policy, economic security, environment and energy, social security and macroeconomic policy were largely absent from the election debate. In fact, during the last several Diet sessions, crucial legislation, such as on economic security, passed with support from opposition parties, including the CDP. As a result, there are no real fundamental policy differences between the LDP and CDP on key issues. Due to the political dynamics between the ruling and opposition parties, party positions may well shift significantly. It will be important to closely watch the movements of both parties as we head toward the extraordinary Diet session.

Please see the annex below for the election results. 

We will continue to keep you updated on developments in Japan as they occur. If you have any comments or questions, please contact BGA Japan Managing Director Kiyoaki Aburaki at kaburaki@bowergroupasia.com.

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Managing Director

Kiyo understands the Japanese business community inside and out from his three decades working for Japan’s most powerful business organization, Keidanren. He covers international trade and investment, defense and aerospace, information technology, entrepreneurship, deregulation and data privacy policy. He also played a leading role in developing and implementing political strategies for the private sector. Kiyo has led Keidanren’s strategic international initiatives since 2013, and most recently headed up the federation’s international engagement. He worked closely with former Prime Minister Yasuo Fukuda to establish Japan’s Track 1.5 dialogues with the United States and China. The dialogues produced important results by strengthening ... Read More