Japan's ruling coalition is poised to lose a significant number of seats in the upper house election, as voters express frustration over rising inflation and immigration policies: Nikkei #breaking

Japan's ruling coalition is poised to lose a significant number of seats in the upper house election, as voters express frustration over rising inflation and immigration policies: Nikkei #breaking

Tokyo, July 2, 2025 — Japan's ruling coalition is set to lose a substantial number of seats in the upcoming upper house election, as voters express growing frustration over rising inflation and immigration policies. The election, scheduled for Sunday, July 20, is crucial for Prime Minister Shigeru Ishiba and his coalition, which is fighting to retain its majority after losing control of the lower house in the October 2024 election [1].

The election will decide half of the 248 seats in the upper house, with early results expected Sunday night. The coalition, led by the Liberal Democratic Party (LDP) and its junior partner Komeito, currently holds 113 seats in the upper house [2]. The opposition bloc, led by the Constitutional Democratic Party of Japan (CDP), holds 91 seats, with nine seats unaffiliated and the remaining vacant [3].

Inflation, particularly food prices, has been a major concern for voters. Japan's annual inflation rate eased to 3.3% in June 2025, marking the lowest reading since last November [2]. However, food prices rose 7.2% year-on-year in June, pointing to the steepest pace since March [2]. The LDP-led coalition has faced criticism for its inability to quickly deliver effective measures to mitigate rising prices, including Japan's traditional staple of rice [3].

Immigration policies have also become a key issue, with a surging right-wing populist party, Sanseito, leading the campaign with its "Japanese First" platform. The party proposes a new agency to centralize policies related to foreigners and has gained significant ground at the LDP's expense [3].

A poor performance in the upper house election would not immediately trigger a change of government, as the upper house lacks the power to file a no-confidence vote against a leader. However, it would deepen uncertainty over Ishiba's fate and Japan's political stability. Ishiba would face calls from within the LDP party to step down or find another coalition partner [3].

Investors and financial professionals should closely monitor the election results, as a significant loss for the coalition could lead to political instability and potentially impact economic policies and trade negotiations. The election comes amid growing tensions with the U.S. over trade and military spending, with Washington demanding allies Japan and Australia to make clear that they would join the U.S. in war against China over Taiwan [3].

References:
[1] https://asia.nikkei.com/Politics/Japan-election/Japan-upper-house-election-live-Voting-coming-to-a-close
[2] https://seekingalpha.com/news/4468433-japans-core-inflation-eases-to-33-in-june-slowest-pace-since-march
[3] https://www.npr.org/2025/07/20/nx-s1-5473901/japan-election-ishiba