Japan is at a crossroads following a recent election that left the ruling Liberal Democratic Party (LDP) without a majority, raising concerns of political instability at a crucial time for the country. The outcome has thrust Japan, the world’s third-largest economy, into a period of uncertainty and has raised questions about its ability to maintain strong leadership on global issues. The implications are significant, especially as the United States, Japan’s primary ally, may be on the verge of welcoming back Donald Trump to the White House, a shift that could test the resilience of Japan’s government.
The election results have cast doubt over Japan’s political stability as Prime Minister Shigeru Ishiba grapples with challenges from both inside and outside his party. While Ishiba remains steadfast in his decision to stay in power despite his party’s failure to secure a majority, the absence of a clear winner has brought Japan to the brink of a policy deadlock, reminiscent of the revolving-door leadership of the 1990s and early 2000s.
Ishiba’s LDP, which had hoped to maintain its dominant position in parliament, now faces a daunting task of cobbling together enough support to keep his administration afloat. His coalition captured only 215 of the necessary 233 seats required to secure a majority, making it Japan’s first hung parliament since 2009. Although Ishiba has indicated his intent to form alliances with smaller parties, these efforts come at the risk of compromising his policy agenda, which prioritizes defense, economic reform, and Japan’s position on the global stage.
One potential partner, the conservative Democratic Party for the People (DPP), could provide the votes needed to keep Ishiba in power. DPP head Yuichiro Tamaki expressed willingness to negotiate on specific policies, such as expanding non-taxable income allowances to benefit lower-income workers. However, Tamaki has shown reluctance toward joining a coalition formally, signaling that any agreement with the LDP may be tenuous at best.
This fragmentation within Japan’s political landscape has raised questions about the country’s ability to navigate pressing global issues, especially as regional tensions escalate. Japan’s stance on critical matters like the Ukraine conflict, Taiwan’s security, and China’s growing influence may be challenged by a coalition or minority government that lacks cohesive leadership and clear policy direction.
Political gridlock could also stall Japan’s efforts to address its economic challenges, which have been compounded by a reliance on monetary and fiscal stimulus. The country’s unique economic situation, marked by low inflation and a heavy national debt burden, has kept the Bank of Japan (BOJ) cautious in its approach to interest rate hikes. However, a shift towards more orthodox economic policies could be slowed by Ishiba’s need to appease coalition partners who advocate for increased spending on household and small-business support measures.
In his campaign, Ishiba promised an economic package to counter inflationary pressures and aid struggling sectors. Yet without a solid governing mandate, he may find it difficult to pass such measures without making substantial concessions. The BOJ, for example, might face greater resistance in its cautious attempt to raise interest rates, as opposition voices push for additional fiscal support.
Markets responded quickly to the election results, with a weaker yen and gains in Japanese stocks reflecting investor apprehension over the nation’s political future. The BOJ’s long-standing policies could be in jeopardy if the government is forced into stimulus-heavy spending agreements, potentially undermining Japan’s attempts to stabilize its economy.
The potential return of Donald Trump to the White House next year has put additional pressure on Japan to prepare for renewed demands on its alliance with the United States. During Trump’s previous term, he consistently pushed Japan and other allies to increase their contributions to defense spending. Japan’s government now faces the prospect of having to renegotiate agreements surrounding the cost of hosting US troops by 2026, a delicate topic that would require a stable, assertive administration.
Compared to former Prime Minister Shinzo Abe, who maintained a strong and stable alliance with Trump’s White House, Ishiba’s fractured coalition government may struggle to maintain the same level of engagement and diplomatic finesse. Abe’s personal diplomacy with Trump, facilitated by a close, golf-playing friendship, underscored Japan’s ability to navigate the often-unpredictable former president’s foreign policy demands. Ishiba, however, may find it more challenging to establish the same rapport and handle the added pressure that a Trump presidency could place on Tokyo.
Observers are already wary of how an unstable Japanese government might approach renegotiations with the US. Mireya Solis, a leading expert on US-Japan relations at the Brookings Institution, noted that any effort by Trump to secure a higher cost-sharing agreement or to impose new tariffs on Japanese goods could be difficult for a coalition government with limited influence. “Those kinds of negotiations may be harder without the stability needed for Japan to make firm commitments,” Solis remarked.
The recent election results have revived memories of Japan’s “revolving door” era, where the country saw frequent changes in prime ministers, often undermining its capacity to build a consistent international presence. Abe’s tenure from 2012 to 2020 marked a critical shift, with his leadership providing stability that positioned Japan as a more confident actor on the global stage. This trajectory continued under Abe’s successor, Fumio Kishida, whose steady diplomacy further consolidated Japan’s strategic alliances.
In the years since Abe, Japan’s approach to foreign policy and economic reform has been defined by cautious pragmatism and a greater willingness to engage in multilateral forums. The challenge now lies in whether Ishiba can keep this momentum in the face of internal challenges. Tobias Harris, founder of Japan Foresight LLC, argues that the uncertainty surrounding Ishiba’s administration could impair Japan’s ability to engage in personal diplomacy with other global powers. “It may be difficult to expect serious engagement by Ishiba or a successor in personal diplomacy with the next US president, for example, or with the Chinese or South Korean governments,” he wrote in a recent note.
One of the most pressing questions now facing Japan is how it will finance its unprecedented increase in defense spending. In 2022, Japan committed to boosting defense outlays by 60% over five years, a historic shift that would elevate the country to one of the world’s largest military spenders. Kishida had previously indicated a preference for tax increases to fund the defense expansion, a move that may now be off the table as Ishiba’s fragile government faces the challenge of keeping coalition allies satisfied.
Katsuya Yamamoto, program director at the Sasakawa Peace Foundation, highlighted the financial dilemma that Japan faces amid its political instability. “When there is this kind of political instability, it inevitably gives other nations the impression that Japan’s leadership has weakened,” Yamamoto said. Japan’s renewed commitment to strengthening its military capabilities underscores its growing unease with an increasingly assertive China. But the financial path to realizing this commitment remains uncertain as Ishiba’s government navigates an unpredictable coalition arrangement.
Despite the internal shifts in Japanese politics, the core alliance between Tokyo and Washington remains solid. US Ambassador to Japan Rahm Emanuel emphasized that the outcome of Japan’s snap election would not alter the fundamental commitment between the two nations. “This snap election wasn’t a referendum on the US-Japan alliance,” he remarked. “There is a consensus in Japanese politics that the ever-deepening cooperation between our two nations is critical to the security and collective deterrence of the Indo-Pacific region and beyond.”
However, experts warn that even if Japan’s relationship with the US remains intact, the nuances of the alliance may evolve as Japan grapples with its domestic political realignment. For Japan, the current situation signals a return to an era of more contentious coalition politics, where consensus-building and compromise may come at the expense of strong policy decisions.
As Japan prepares to enter a period of political flux, its ability to assert itself on the international stage and uphold its alliance with the US will be tested. The specter of Trump’s possible return to the White House and the challenges of maintaining a fragile coalition underscore the complexity of Japan’s path forward. For Ishiba, or any successor who might replace him in the coming months, balancing domestic and international pressures will be essential to charting a steady course for Japan’s future in an increasingly volatile world.
