Japan’s ruling coalition, led by Prime Minister Ishiba, lost its majority in the Upper House after recent elections, according to exit polls and official results. Despite this setback, Prime Minister Ishiba has vowed to remain in office and continue governing with coalition partner Komeito.
The Liberal Democratic Party (LDP)-Komeito coalition secured 47 seats in the 125-seat Upper House, falling short of the 50-seat majority needed. Exit polls had predicted the loss, sparking market and political reactions.
Ishiba accepted the “harsh result” but emphasized his focus on pressing economic issues such as trade negotiations, inflation, and tariff talks with the United States.
Markets responded with a boost to Japanese government bonds and strength in the Japanese yen, as investors viewed Ishiba’s decision to stay as a stabilizing factor. The yen gained ground against the U.S. dollar, with USD/JPY briefly dipping near 147.79.
The election outcome leaves the ruling coalition without control in either parliamentary house, limiting its legislative power. However, analysts note that opposition parties remain fragmented, reducing the likelihood of a united challenge to the government.
On trade, Japanese officials said tariff negotiator Akazawa plans to visit the U.S. for ministerial-level talks amid ongoing efforts to resolve tariff disputes before the August 1 deadline.
Elsewhere, the European Union is preparing retaliation plans in case trade talks with the U.S. fail, while U.S. Commerce Secretary Lutnick expressed confidence a deal with the EU can be reached soon.
In global markets, European equities fell modestly while U.S. stock futures showed gains, led by the Russell 2000 index. Commodities markets saw mixed activity, with base metals supported by China’s new hydropower projects and oil prices fluctuating amid geopolitical concerns.
Follow on Google News
