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yesterday

Japan’s Ruling Coalition Faces Loss of Upper House Majority

Investor anxiety over Japan’s fiscal outlook has pushed bond yields to record highs, underscoring risks facing the government as financial pressures mount alongside looming U.S. tariffs.

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

  • Combined with the 75 uncontested seats, polling data give the LDP-Komeito coalition around 118 seats, five short of the 125 needed for a majority in the 248-seat chamber.
  • The hard-right Sanseito party is projected to win between 10 and 15 seats on an anti-immigrant, anti-globalist and tax-cut platform.
  • Record sell-offs in Japanese government bonds have driven 30-year yields to all-time highs and pressured the yen to multi-month lows against major currencies.
  • Soaring living costs, exemplified by rice prices doubling since last year, have fueled voter frustration with the ruling coalition.
  • President Donald Trump has threatened to impose a 25 percent tariff on Japanese imports from August 1 unless a trade agreement is secured.