Shigeru Ishiba, Japan’s prime minister and president of the Liberal Democratic Party (LDP), at the party’s headquarters following the lower house election, at the party’s headquarters in Tokyo, Japan, on Sunday, Oct. 27, 2024.
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Japanese Prime Minister Shigeru Ishiba on Monday signaled that he intends to continue running the government after his Liberal Democratic Party and its coalition partner Komeito lost a majority in the lower house following a snap election.
“We will continue to advance national politics in a steady manner,” Ishiba said at a news conference at party headquarters in Tokyo, according to local news. “National politics cannot stagnate for even one moment.”
Ishiba promised to work on an economic stimulus package, and added that the party needs to recognize the reasons behind the oppositions’ gains.
Japan’s ruling coalition lost its parliamentary majority after voters cast their ballots on Sunday to determine control of the lower house. The election marked the first time since 2009 that the LDP has lost its majority.
“Our party fought hard all over the country under the slogan ‘Protect Japan, Turn growth into strength,'” the LDP said in a statement. “However, the party was unable to dispel the public’s distrust over the political funding issue, resulting in a harsh result.”
In various media interviews as votes were being counted, Ishiba had said: “We will humbly and solemnly accept the harsh judgment.”
After markets opened on Monday, Japan’s benchmark Nikkei 225 rose 1.79%, leading gains in Asia, while the Topix was up 1.38%. The moves were supported by a weaker yen, which fell 0.65% to trade at 153.28.
Ishiba succeeded Fumio Kishida as prime minister on Oct. 1 and called for a snap general election on Sept. 30 after winning the party’s internal vote against rival Sanae Takaichi.
The LDP’s election campaign has been dogged by concerns over inflation, as well as corruption scandals which have divided the party. When a slush fund scandal came to light in 2023, four cabinet ministers, as well as other senior party officials, were replaced by former PM Kishida.
On the campaign trail, Ishiba had vowed to reduce the burden on households suffering from rising living costs and showed intentions to boost rural revitalization, as Japan’s countryside suffers from a broader demographic crisis and an aging population.
David Roche, a strategist at Quantum Strategy, said 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.
“Equities will mark time (the bull period is over anyway). JGBs [government bonds] will stagnate waiting to learn about the next bout of futile fiscal largesse or lack of it,” he added.
