The News
Japan was plunged into political uncertainty after the country’s ruling coalition lost its parliamentary majority following general elections on Sunday.
New Japanese Prime Minister Shigeru Ishiba called the snap election after he took office a month ago, as he seeks a clear public mandate to govern, having replaced Fumio Kishida as the Liberal Democratic Party’s leader.
The LDP has governed practically uninterrupted for almost 70 years, and this is its worst result in over a decade.
“Voters have handed us a harsh verdict and we have to humbly accept this result,” Ishiba told national broadcaster NHK Monday.
As analysts predicted, the yen fell to its lowest level in three months following the results, pushing the Nikkei to grow almost 2%.
While the LDP was expected to lose seats, losing the majority “could create a quagmire regarding the legislative process — a scenario which may not bode well for the yen and the Nikkei, at least in the short term,” one market analyst said.
Coalition losses also erode the likelihood that the country’s next government will pursue ambitious policies such as increasing the corporate tax rate.