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1h ago

Japan’s LDP-Komeito Coalition Poised to Lose Upper House Majority as Investor Confidence Wanes

Opinion polls forecasting the coalition’s defeat have driven borrowing costs to record highs, sent the yen to multi-month lows, increased urgency to secure a U.S. trade deal before an August tariff deadline.

Japan's Prime Minister Shigeru Ishiba, leader of the Liberal Democratic Party (LDP), raises his fist from atop the campaigning bus on the last day of campaigning for the July 20 upper house election, in Tokyo, Japan July 19, 2025. REUTERS/Manami Yamada
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A pedestrian passes an election board displaying posters of candidates for the upcoming July 20 upper house election in Tokyo, Friday, July 18, 2025. (AP Photo/Louise Delmotte)
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Overview

  • Polls predict the LDP-Komeito coalition will fall short of the 50-seat threshold, jeopardizing Prime Minister Shigeru Ishiba’s grip on power.
  • Thirty-year Japanese government bond yields climbed to record highs as markets priced in potential political gridlock.
  • The yen weakened to its lowest level in months amid election uncertainty and growing investor jitters.
  • Right-wing populist Sanseito under Sohei Kamiya is set to gain 10–15 seats on an anti-immigration, “Japan First” platform.
  • Japan must finalise a U.S. trade agreement by August 1 or face 25% tariffs on key exports.