Shigeru Ishiba, Japan's Prime Minister and President of the Liberal Democratic Party (LDP), at the party's headquarters after the general election in Tokyo, Japan, on Sunday, October 27, 2024.
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Japanese Prime Minister Shigeru Ishiba signaled on Monday that he intends to continue in government after his Liberal Democratic Party and its coalition partner Komeito lost their majority in the lower house following a snap election.
“We will continue to steadily advance national policy,” Ishiba said at a news conference at the party headquarters in Tokyo, according to local news. “National politics must not stagnate for a moment.”
Ishiba promised to work on a stimulus package, adding that the party must recognize the reasons for the opposition's successes.
Japan's ruling coalition lost its parliamentary majority after voters cast their ballots on Sunday to decide control of the lower house. The election was the first time since 2009 that the LDP lost its majority.
“Our party fought hard across the country under the slogan 'Protect Japan, Turn Growth into Strength,'” the LDP said in a statement. “However, the party failed to allay public distrust over the issue of political financing, leading to a harsh result.”
In various media interviews during the counting of votes, Ishiba had said: “We will humbly and solemnly accept the harsh verdict.”
After markets opened on Monday, Japan's benchmark Nikkei 225 index rose 1.79%, leading the gains in Asia, while the Topix rose 1.38%. The moves were supported by a weaker yen, which fell 0.65% to 153.28.
Ishiba succeeded Fumio Kishida as prime minister on October 1 and called for early parliamentary elections on September 30 after winning the party's internal vote against his rival Sanae Takaichi.
The LDP's election campaign was marked by fears of inflation and corruption scandals that have divided the party. When a black money scandal came to light in 2023, four cabinet ministers and other senior party officials were replaced by former Prime Minister Kishida.
During the election campaign, Ishiba had vowed to ease the burden on households suffering from rising living costs and showed intentions to push for rural revitalization as Japan's rural areas suffer from a broader demographic crisis and an aging population.
David Roche, a strategist at Quantum Strategy, said Ishiba is now a “dead man” and his Liberal Democratic Party is “very likely to lose power entirely or have its power greatly diluted in a chaotic coalition after an even more chaotic long period of haggling.” “
“What is certain is that political uncertainty will prevail as the haggling continues,” he said in a flash research note on Sunday evening, predicting the yen would weaken from here.
“Stocks will shape the times (the bull phase is over anyway). JGBs [government bonds] “We will sit stagnant and wait to hear about the next bout of wasted fiscal largesse, or lack thereof,” he added.
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