The Japanese ruling coalition suffered a devastating defeat! Shigeru Ishiba faces the challenge of forming a cabinet, with worrying political and economic prospects?

The ruling coalition lost the majority of seats, marking its worst performance in 15 years

According to the report by the well-known Japanese media NHK, Japanese voters delivered a severe punishment to the long-ruling coalition of the Liberal Democratic Party (LDP) and Komeito in Sunday's House of Representatives election, plunging the world's fourth-largest economy into rare political uncertainty. The LDP and Komeito secured only 215 seats in the 465-seat House of Representatives, falling short of the 233 seats required for a majority, marking the first time since 2009 that the ruling coalition failed to secure a majority.

Image source: NHK The Liberal Democratic Party and Komeito only won 215 out of 465 seats in the House of Representatives, which is below the 233 seats needed for a majority.

The election results have dealt a major blow to newly-appointed Prime Minister Shigeru Ishiba. He took the risk of dissolving the parliament and calling for early elections earlier this month to consolidate his position, but the result turned out to be the opposite. Ishiba stated that the voters have made a 'harsh judgment' on his party and admitted the need for reflection to align with the people's will. He also pointed out that the voters have expressed a strong desire for the Liberal Democratic Party to 'reflect and become a party that aligns with the will of the people'.

The opposition party's seats have greatly increased, and the prospects for forming a cabinet are uncertain.

The main opposition party, the Constitutional Democratic Party (CDP), made significant progress in this election, increasing from 98 seats before the election to 148 seats. The party leader, Yoshihiko Noda, said, 'Our goal is to break the majority of the ruling party, and this goal has been achieved, which is a great achievement.' However, the opposition party still failed to gain enough seats to form a government, leading to a more uncertain political future in Japan.

In order to continue in power, the Liberal Democratic Party may need to form a coalition government with other parties or attempt to govern as a minority government. However, in either case, Shigeru Ishiba's position as Prime Minister may be threatened, and the path to forming a cabinet is full of challenges. Analysts point out that policy differences among opposition parties make it difficult for them to form a coalition government, and the weak position of the Liberal Democratic Party will also put them at a disadvantage in forming alliances.

Economic pressure and scandals have sparked voter dissatisfaction.

The election results reflect the Japanese people's dissatisfaction with the ruling coalition. The ongoing rise in the cost of living, Inflation, and the scandal involving millions of dollars in political funds by the Liberal Democratic Party have led voters to express strong dissatisfaction at the polls. The scandal involves factions within the party failing to accurately report income and even being accused of using fundraising proceeds as kickbacks to lawmakers.

Former Prime Minister Fumio Kishida attempted to control the damage by replacing multiple cabinet ministers and dissolving factions within the Liberal Democratic Party, but was ultimately forced to announce in August that he would not seek re-election. After taking over, Shigeru Ishiba tried to push for a series of reforms, including providing financial assistance to low-income families, raising the minimum wage, and revitalizing regional economies, but these measures failed to regain the trust of voters.

Image source: Reuters Japanese Prime Minister Shigeru Ishiba speaks to the media at the Liberal Democratic Party headquarters.

The intensification of political uncertainty has cast a shadow over the economic outlook.

The election results have plunged Japan into a political stalemate, and the various parties will engage in fierce power struggles in the coming weeks to form a new government. This uncertainty has raised concerns in the market, and the Japanese Yen Exchange Rate fell to a new low in three months on Monday. Investors are worried that political turmoil will affect the formulation of economic policies.

Image source: Google Finance Japan's political deadlock has raised market concerns, causing the Japanese yen Exchange Rate to fall to a new low in three months on Monday.

As a stable political force in the Asia-Pacific region and a reliable ally of the United States, Japan's political changes not only affect the domestic situation, but also attract attention from the international community. The new ruling coalition needs to quickly restore political stability in order to effectively address internal economic challenges and external security threats. Analysts warn that political uncertainty may weaken the government's ability to implement economic reforms and impact its cooperation with major allies such as the United States.

[Disclaimer] The market is risky, and investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, perspectives or conclusions in this article are applicable to their specific situation. Investing based on this is at your own risk.