On July 20, Japan’s longtime ruling coalition, led by the Liberal Democratic Party (LDP), suffered a setback in the upper house election. As a result, the LDP now leads a minority government in both houses of the Diet for the first time in the past 70 years. Voters sent the government of Prime Minister Ishiba Shigeru a clear rebuke on its handling of domestic economic issues, and smaller populist parties such as Sanseito and the Democratic Party for the People (DPFP) reaped significant gains in seats.
Yet, just two days after the election, when the Ishiba government was expected to be at its weakest, Japan announced a trade deal with the United States, a major victory after months of negotiations.
As Japanese politics enter a new more fluid and uncertain state, what are the implications for the country’s foreign policy moving forward?
Although much depends on the choices that politicians make in the weeks ahead, the immediate aftermath of the election already suggests several potential effects on Japanese foreign policy. Overall, consistent strategic considerations, the continuing influence of the LDP-Komeito coalition, and the fragmentation of the opposition mean that the fundamental direction of Japanese foreign policy is unlikely to change dramatically in the near term. However, the new power balance and increasing political instability will pose challenges to decisive leadership and give opposition parties more sway in specific situations.
There are some relatively predictable consequences of the election. First, although Ishiba has indicated that he wishes to stay on as prime minister, a change in top leadership is typical after such a loss, and pressure has grown for his resignation.
Second, the new distribution of seats in parliament will lead to slower decision-making in some cases. With opposition parties seemingly unwilling to risk their reputations by joining in coalition with the unpopular LDP, it will be forced to negotiate issues on a case-by-case basis to gather the small number of additional votes needed to pass legislation. Even if the LDP managed to find a new coalition partner such as Nippon Ishin no Kai, it would likely still be a slower process due to more complex internal coordination.
Third, these dynamics may result in a relative emphasis on economic stimulus or inflation countermeasures when it comes to budget negotiations. Since the LDP lost its majority in the lower house in October, opposition parties have used their leverage to demand budget concessions such as educational subsidies and raising the income threshold for tax payments, and this trend is likely to continue.
Looking forward, these dynamics could affect approval of key legislation and the resources devoted to foreign policy objectives. For example, agreements such as the recently announced Japan-U.S. trade deal need to go through the Diet for approval, where they could now face delays or challenges from opposition parties.
As things currently stand, the Japan-U.S. deal is a broad framework with details yet to be determined, so it does not have a formal text to be evaluated or approved by the Diet – nor is it clear when such a text will be forthcoming based on other recent U.S. deals. In the meantime, however, if the Japanese government needs to allocate resources to fund its reported pledge to invest $550 billion in the United States, the opposition might complicate approval.
Another challenging scenario would be a reduction in the consumption tax, as advocated by some opposition parties and supported by many Japanese voters, which would decrease overall revenue and make it difficult for the Japanese government to maintain or increase spending on defense, aid, and other foreign policy priorities.
However, there may be limits to the opposition’s willingness to be obstructionist. Although opposition parties have a great deal of incentive to criticize the LDP-Komeito coalition and to capitalize on its weakness, habitually blocking policies could backfire badly. The Japanese public has been skeptical about the opposition’s ability to govern since its experience with the Democratic Party of Japan from 2009 to 2012. If the current opposition parties are perceived to be acting against Japan’s national interest by blocking legislation frivolously, they could lose the support they’ve recently gained.
The broader effects of the election on foreign policy are more complex. The election may most directly impact the area of immigration, which became a hot topic on the campaign trail when Sanseito and the Conservative Party of Japan emphasized problems related to foreign workers and tourists. Although foreigners make up only about 3 percent of the population, immigration has been increasing at a relatively rapid pace in recent years due to labor shortages connected with an aging workforce. Tourism has also surged due to the weak yen.
The LDP moved quickly to respond to these sentiments during the campaign, launching a new cross-agency office overseeing these issues. Other types of restrictions on immigration and tourism could follow, though it is not clear whether most Japanese people really want these changes. In one exit poll, only 6.1 percent of respondents claimed that they voted based on foreigner-related issues, whereas the majority were focused on economic issues.
The direct impact on broader foreign and defense policy may be limited, although the new balance of power could potentially give opposition parties more influence in some areas. For the last decade, the LDP has steered Japan toward a path of strengthening the Japan-U.S. alliance, enhancing national defense capabilities, and pursuing a Free and Open Indo-Pacific vision of regional and global engagement. The Japanese public is well aware of the increasingly unstable security environment; polls show that Japanese respondents feel threatened by North Korea (89.3 percent), China (89.1 percent), and Russia (74.6 percent), and 89.7 percent see the Japan-U.S. Security Treaty as useful for their country. This sentiment has enabled the LDP to pursue a historic increase in defense spending to 2 percent of GDP by 2027 and a host of measures to bolster the Japan-U.S. alliance.
In contrast, the foreign policy platforms of the opposition parties remain relatively less developed, and they span the ideological range from progressive to ultra-conservative, which means that there is no opposition consensus on an alternative direction for Japan. Still, most opposition parties tend to support the continuation of the Japan-U.S. alliance. Likewise, a recent poll showed strong support for the planned increase in defense spending to 2 percent among upper house election candidates from the LDP, Sanseito, DPFP, Nippon Ishin, and Komeito.
However, opposition parties differ on the degree to which they believe Japan should pursue greater independence in its foreign policy or increased sovereignty within its relationship with the United States. Some wish to renegotiate specific details of the Status of Forces Agreement that governs the legal status and authority of the U.S. military in Japan. Other politicians might advocate for responding to the current unpredictability in U.S. foreign policy by strengthening relationships with other countries, either as a complement or an alternative to Japan’s partnership with Washington. The new political balance could reopen some of these sensitive issues for debate, which could lead to friction in Japan-U.S. relationS – and U.S. demands for Japan to increase defense spending above 2 percent and increase burden sharing will be divisive.
Another complicated set of calculations involves the ways that the LDP might react internally to the disappointing election results, perhaps by attempting to recapture former right-wing supporters who have drifted to populist parties. Some evidence of this has already been demonstrated by the LDP’s recent moves on immigration. On defense policy, a shift to the right could be consistent with the current trajectory of strengthening the Japan-U.S. alliance, but it could also involve advocating for a more independent Japan. This might be welcomed by the Trump administration financially, but it might also strain bilateral relations in other ways. If the LDP decides to replace Ishiba with a new, more conservative leader with revisionist views, this could also lead to tensions with South Korea, China, and other regional neighbors.
It remains to be seen how Japanese politicians will choose to navigate the new post-election configuration of power, but the days ahead will be challenging. They face a quickly evolving foreign policy environment and a more fluid domestic political context where their fortunes could shift rapidly. As parties compete to woo an electorate that wants to see positive change in their daily lives, they have a delicate balance to strike between delivering immediate results and protecting the long-term interests of Japan.