Japan’s political landscape is experiencing a significant shift after Prime Minister Shigeru Ishiba announced a snap election on October 27, aimed at securing his position amid a fractured political environment. Ishiba’s move was intended to consolidate power as the Liberal Democratic Party (LDP) is facing a popularity crisis amid the party’s slush fund scandal involving several prominent leaders, including former Prime Minister Fumio Kishida. Ishiba, who succeeded Kishida, hoped to achieve a clear mandate by calling the snap elections. Before the elections, the LDP, with its coalition partner Komeito, held a stable majority of 279 seats. However, after the vote, this majority was significantly reduced, with the LDP securing only 191 seats and Komeito 24, resulting in a total of 215 seats — falling short of the 233-seat halfway threshold. Diplomatic risks, such as potential trade tariffs and demands for increased defense spending under a new Trump administration, pose new challenges for Japan. With low approval ratings and rising pressure for both higher spending and tax cuts, the Ishiba government will need to carefully balance domestic consensus-building and strengthen relations with the United States, which will entail higher defense spending.
Despite being unable to win a comprehensive majority, Ishiba was reappointed as Japan’s prime minister after winning a run-off vote, which happened for the first time in the last 30 years. He will steer a minority government, which will pose challenges and difficulties in addressing domestic and foreign policy issues. Furthermore, Ishiba will have to gain support from opposition parties like the Democratic Party for the People (DPP) to pass a supplementary budget this winter amid rising welfare demands and disagreements within Japan’s National Diet concerning tax policies. The leader of the DPP, Yuichiro Tamaki, has now emerged as a key political figure in Japan after the hung Parliament. Tamaki is advocating for a major change to Japan’s income tax law, pushing to raise the income tax threshold from 1.03 million yen to 1.78 million yen, which he believes would benefit younger voters and encourage part-time workers to increase their hours. While Ishiba seeks cooperation with smaller opposition parties like the DPP to pass the government budget, Tamaki remains cautious about aligning too closely with the LDP.
The political shifts in Japan are unfolding amid broader regional and global geopolitical developments, particularly with the Republican Party’s victory and Donald Trump’s return to power in the United States. During his campaign, President-elect Trump signaled his intention to shift US foreign policy toward a more protectionist and transactional approach, which could have far-reaching implications for US allies like Japan. During his earlier term, Trump had asked Japan to pay more for the US military presence in the country. Republican Senator Bill Hagerty reiterated this recently, suggesting a continuity in Trump’s approach toward the region. North Korea continues to strengthen ties with Russia and China, while China maintains its assertive stance in the Indo-Pacific. In response, countries like Japan are increasingly focused on strengthening their defense capabilities to navigate these evolving geopolitical and regional security challenges. The Japanese government has raised its defense budget to reach 2% of GDP by 2027. In the wake of rising regional tensions, Ishiba has proposed strengthening the Japan-US alliance by stationing Japan’s Self-Defense Forces (JSDF) in Guam to enhance mutual deterrence capabilities. He suggests creating a status agreement for the JSDF in Guam similar to the one for US forces in Japan. Additionally, Ishiba advocates for expanding joint management of US military bases in Japan, which would alleviate the burden on US forces there. He has also proposed the joint use of US military bases in Okinawa by both US and Japanese forces. He aims to elevate the Japan-US alliance so that both countries are considered equal partners. Tamaki has also often stressed the need for Japan to bolster its defense capabilities amid a tense regional security situation. Tamaki advocates for maintaining strong ties with China while prioritizing Japan’s national security and the importance of the US-Japan-South Korea alliance. As per the 2024 Defense of Japan Report, Japan’s defense policy objectives focus on strengthening core defense capabilities, deepening cooperation with allies like the United States for regional stability, and reinforcing human resources to support the SDF. As the regional security situation becomes more tense against the backdrop of North Korea’s long-range ballistic missile tests and threats to neighbors as well as escalating tensions with China in the South China Sea, Tokyo now has to deal with managing both its defensive posture and diplomatic efforts to ensure stability.
Another notable area in which Ishiba will face challenges is navigating Japan’s economy. Japan’s trade surplus with the United States has grown significantly after its exports to the United States reached $133 billion last year. However, there is a chance of uncertainty if Trump reintroduces tariffs on imported goods, which would affect Japan’s competitiveness. The potential tariff hikes and trade disruptions, including a potential 60% tariff on Chinese goods, could also harm Japanese supply chains. The economic challenges Japan faces are intertwined with external pressures like US tariffs and internal demands for economic reform. Ishiba has already emphasized the need for cooperation with opposition parties to enact policies and political reforms. He discussed potential revisions to tax laws and political funds with Tamaki and the Constitutional Democratic Party of Japan President Yoshihiko Noda. Ishiba also called for collaboration on political reform with Japan Innovation Party leader Nobuyuki Baba, though Baba expressed dissatisfaction with previous agreements not being upheld.
For Japan’s political and economic stability, it will be crucial for Ishiba to uphold a balance between maintaining competitiveness abroad, addressing inflation, and implementing necessary tax reforms. The outcome of political cooperation between Ishiba and opposition leaders, alongside his responses to shifting global geopolitical and economic tectonics, will be crucial in shaping Japan’s trajectory in the near future.
