Minority Government in Japan

Losses in the lower house election

Ishiba’s first act after his confirmation as prime minister on 1 October 2024 was to call new elections, seeking to begin his tenure with an electoral mandate of his own. However, he failed to win an absolute majority of the 465 lower house seats in the election on October 27. The LDP and its coalition partner Komeito only secured 215 seats between them, losing 64 seats overall. The opposition Constitutional Democratic Party (CDP) led by former prime minister Noda Yoshihiko made the biggest gains and now has 148 deputies. The two next-largest opposition parties are the Japan Innovation Party (JIP), which has a strong base in the Osaka region and won 38 seats, and the Democratic Party for the People (DPFP), which quadrupled its representation to 28.

One major reason for the governing coalition’s poor performance was Ishiba’s loss of public credibility as a reformer and innovator. After taking over as party leader he backed away from earlier promises, ap­parently at the instigation of forces within the party. The snap election contradicted his previous stance that a new vote should only be held after extensive debate with the opposition. Ishiba came under particular criticism for his dealings with scandal-tainted LDP politicians, after he had pre­viously promised to improve transparency and deal thoroughly with the party funding scandal. Although twelve of the disgraced politicians were barred from standing offi­cially for the LDP, the party allowed most of the others to run in their constituencies. Finally, just days before the election it was revealed that party funds had been al­lo­cated to local branches run by candidates who had been denied official LDP support. For many observers this represented de-facto campaign funding and proved that the LDP was unwilling to reform.

Ishiba also failed to convince the electorate on the economy. Private households have struggled with rising living costs since the COVID-19 pandemic, and a significant depreciation of the Japanese yen since 2022 has exacerbated inflation. Ishiba’s campaign promises on economic policy went little further than those of his predecessor Kishida, with a few exceptions such as raising the minimum wage.

The low turnout of just under 54 percent – the third-lowest in Japan’s post-war his­tory – indicates that the opposition parties failed to spark enthusiasm either. This was in stark contrast to the historic 2009 elec­tion, which saw a landslide victory for the opposition and turnout of almost 70 per­cent.

A fragile minority government

The election produced a stalemate, where neither the LDP nor the main opposition party, the CDP, was able to assemble a parliamentary majority. A “grand coalition” was out of the question for the CDP, which had campaigned on a platform demanding a change of government. The two next-largest opposition parties, JIF and DPFP, saw little advantage in entering into a coalition with either of the larger parties. Close co­operation with the scandal-ridden LDP could harm their image, with consequences for the upper house election scheduled for July 2025. Both also had good reasons to reject a coalition with the CDP. The distrib­ution of seats in the lower house would have made it very hard to achieve a major­ity there, while the LDP-Komeito majority in the upper house would have been able to block any proposed legislation.

Ishiba was re-elected as prime minister in a run-off vote in mid-November, with the votes of the LDP and Komeito. His minority government now faces the challenge of organising parliamentary majorities for legislative proposals and budget decisions. The Ishiba government risks being brought down by a confidence vote, if enough op­position parties come together. The CDP has hinted that it is considering such a move during the regular parliamentary session starting in late January 2025. In any case, the governing parties will have to devote considerable time and effort to negotiating compromises with opposition parties.

Many observers believe that Ishiba can­not last long in this situation. If the oppo­sition parties seek to distance themselves from the LDP-Komeito government in the run-up to the upper house election, it will become even more difficult to reach agree­ments. And unless the LDP’s prospects for the upper house election improve, internal criticism of Ishiba is likely to grow.

Although Ishiba faces immense challenges, it cannot be ruled out that he and his governing coalition will find a modus operandi with the DPFP or the JIF. However, this would likely require substantial con­cessions to the opposition parties. The DPFP has emphasised that it stands for “solutions rather than confrontation” and is open to case-by-case cooperation. In its campaign, which focussed on domestic policy, the DPFP called for tax relief, in particular raising the income tax threshold and reduc­ing the gasoline tax. In his first speech to the new parliament at the end of November 2024, Ishiba said that he intended to raise the income tax threshold, likely in an at­tempt to woo the DPFP. However, given the state’s tight finances, there is resistance within the LDP to this proposal, which would reduce annual tax revenues by 7 to 8 trillion yen (about 44 to 51 billion euros).

A supplementary budget was passed in December 2024, suggesting that a modus operandi between government and oppo­sition can be found. Both the DPFP and the JIP supported the budget after the LDP agreed to discuss their demands. The JIP is seeking talks with Ishiba about abolishing high school tuition fees.

The LDP has also negotiated compro­mises on party funding rules with oppo­sition parties including the CDP, DPFP and JIP. In December 2024, parliament passed three legislative amendments designed to enhance the transparency of party financ­ing. However, there is still disagreement on the question of whether donations from companies and other organisations should be banned, as the CDP proposes. The LDP, which benefits greatly from such donations, rejects the idea. The CDP is likely to put this topic back on the agenda during the ordinary parliamentary session, which started on 24 January 2025.

The parliamentary negotiations on the regular budget will be a key test of whether Ishiba can continue to engage in constructive dialogue with the opposition. If Ishiba is perceived to be too willing to concede to the opposition’s demands, critics within his own party may accuse him of lacking re­solve and leadership.

Despite the fragile domestic political situation, the results of the lower house election offer an opportunity to strengthen the role of parliament. During the recent period of LDP-Komeito dominance parlia­ment has been a weak actor in political processes, largely relegated to the role of confirming the decisions of the ruling coalition. Opposition parties now chair seven of the 17 standing committees in the lower house, five more than before, and can thus exert more influence on the par­lia­mentary schedule and agenda. For the first time in 30 years an opposition party, the CDP, chairs the powerful budget com­mittee, enabling it to question cabinet mem­bers on a wide range of issues.

Japan’s challenging security environment

During the election campaign, foreign policy and security issues played a greater role than in the last lower house election in 2021. Japan’s security environment has deteriorated significantly in recent years, with China stepping up its military activi­ties around Japan. August 2024 saw the first encroachment into Japanese airspace by a Chinese warplane, and in September a Chinese aircraft carrier passed between two Japanese islands near Taiwan. Tensions on the Korean peninsula have also grown, with the North Korean regime likely receiv­ing technical assistance for its nuclear and missile programmes from Russia in ex­change for supporting Russia’s war against Ukraine.

Two new foreign policy challenges have emerged since the lower house election. The first is Donald Trump’s reelection as president of the United States, Japan’s most important ally. Trump’s transactional America-first approach reinforces Tokyo’s doubts about the credibility of the security partnership. Tokyo also fears bilateral disputes, for example over security burden-sharing, and the unpredictability of Trump’s foreign policy, for example with regard to tensions around Taiwan Strait and North Korea. A second challenge for Japan is the political crisis in South Korea prompted by (now suspended) President Yoon Suk Yeol’s brief declaration of martial law in early December 2024. This is a setback for Japan, because Japanese–South Korean relations had improved significantly over the last two years under Yoon, while trilateral coop­eration with the United States had also deepened.

Foreign and security policy priorities under Ishiba

Given the difficult security environment, Ishiba wants to strengthen Japan’s defence capabilities and intensify its security co­operation with the United States and other countries. Ishiba hopes to hold an early meeting with President Trump. His defence policy seeks continuity with his predecessor Kishida. After the Russian invasion of Ukraine, which Kishida called a “historic turning point”, Japan announced far-reach­ing changes to its security policy at the end of 2022, including a commitment to in­crease its defence and security spending to 2 percent of its 2022 GDP by 2027. The defence budget for 2024 was almost 8 tril­lion yen (about 50 billion euros), a massive 47 percent increase over 2022. Ishiba in­tends to continue this course.

He finds support for this not only from his coalition partner Komeito, but also from the JIP, the DPFP and even the CDP. The latter had tended to take more “left-wing” positions in recent years, for example ques­tioning the acquisition of medium-range missiles. The CDP has changed course under Noda’s leadership, and now ad­vocates a “realistic foreign and security policy”. Trump’s reelection will likely further rein­force the broad consensus on the need to strengthen Japan’s defence capabilities.

Nevertheless, Ishiba will face opposition resistance on the financing side. During the election campaign the CDP, JIP and DPFP rejected the LDP’s plans for additional taxes for defence spending, without putting for­ward any alternative proposals of their own. The ruling coalition has already post­poned the decision on tax increases several times. It will be difficult to reach agreement on this unpopular measure before the upper house elections, with possible knock-on effects on realisation of Japan’s plans to expand its defence capabilities.

Ishiba does not want to rely solely on deterrence vis-à-vis China, however. He has repeatedly emphasised that Japan should utilise all opportunities for dialogue to stabilise relations and avoid misunderstandings and escalations. Trump’s presidency and the associated uncertainties appear to be encouraging China to seek a better relationship with Japan. Hesitant signals have emerged from Beijing. For example, the Chinese government has indicated that it wants to gradually lift the ban on Japa­nese seafood imports that was introduced in 2023. According to media reports, Ishiba has also raised the possibility of a bilateral state visit.

Ishiba sets great store by improving relations with South Korea, but had to cancel a planned visit to Seoul due to the political crisis there. If new elections were to bring the opposition Democratic Party to power, its anti-Japanese stance could lead to a deterioration in bilateral relations.

Before his election as prime minister, Ishiba caused a stir with two controversial ideas in the field of security policy. Firstly, he called for the creation of an Asian NATO, an idea he has been pursuing for several years. Secondly, he demanded a revision of the Status of Forces Agreement with the United States, which has been in place since 1960, criticising certain privileges enjoyed by the United States as unfair. However, both of these proposals met with harsh criticism from American foreign and secu­rity policy experts and State Department officials. Ishiba’s ideas were also rejected by other Asian countries and from within his own party. Ishiba has not mentioned the two proposals in his two keynote addresses to parliament as prime minister, so they appear to be off the table – although an internal committee on security policy has been formed to discuss Ishiba’s ideas.