Japan’s political future was shrouded in uncertainty on Monday after voters punished the ruling coalition over rising prices and a funding scandal, paving the way for days of wrangling as party leaders try to form a government.
The Liberal Democratic party (LDP) and its longtime junior coalition partner Komeito failed to secure a majority in the lower house on a bruising night in which the main opposition Constitutional Democratic party (CDP) made significant gains.
The result – which left no single party with a clear mandate – is the LDP’s worst performance since 2009, when it was cast into the wilderness for three years before mounting a comeback under the leadership of Shinzo Abe.
A chastened prime minister Shigeru Ishiba, who was due to give an address on Monday afternoon, said voters had issued a “severe judgment” against the LDP.
They had “expressed their strong desire for the LDP to do some reflection and become a party that acts in line with the people’s will”, he told the public broadcaster NHK.
Uncertainty over whether the coalition can reach a deal with a third party and secure a working majority sent the yen to a three-month low against the dollar on Monday as investors braced for a period of political and economic uncertainty.
The LDP and Komeito won a combined 215 seats, down from 279 and well below the 233 they needed to retain their majority. Two cabinet members lost their seats, as did several other candidates implicated in a slush fund scandal that has battered the LDP’s approval ratings in recent months. The biggest winner was the CDP with 148 seats, up from 98.
Having seen his snap election gamble fail spectacularly Ishiba must now attempt to cobble together a three-party coalition that could include MPs from the centre-right Democratic party for the People or the populist Japan Innovation party.
Few analysts expect the opposition parties, which range from conservatives to communists, to unite to form an alternative coalition given their policy differences.
But the CDP’s leader, Yoshihiko Noda, said the result was proof that the LDP-Komeito coalition could not continue. “This is not the end, but the beginning,” Noda told a press conference, adding that his party would work with other opposition parties to aim for a change of government.
Under Japan’s constitution, the parties now have 30 days to put together a coalition, but pressure is expected to mount on senior politicians to act quickly. The gridlock comes as a time of uncertainty for Japan’s economy, growing concern over China and North Korea, and just days before the U.S. presidential election.
There will be questions, too, about the decision by Ishiba, who became prime minister only a month ago, to call an early election while his party was embroiled in a major funding scandal.
“Whether or not Ishiba resigns as LDP leader today, it seems unlikely that he will survive to lead a new government as prime minister … although it is possible he could stay on as caretaker,” said Tobias Harris, founder of the political risk advisory firm Japan Foresight.
Masakazu Tokura, the chair of Japan’s most influential business lobby, called for a quick return to political stability for the sake of the economy. “We strongly hope for policy-oriented politics through the establishment of a stable government centred on the LDP-Komeito coalition,” he said in a statement.
