Japan's ruling coalition loses majority, government in flux

Japan's ruling coalition lost its majority in the House of Representatives in the elections held on Sunday for the first time since 2009, leaving no party with a clear mandate to lead the world's fourth-largest economy.

The loss has left the government in flux. The uncertainty sent the yen currency to a three-month low as analysts prepared for days, or possibly weeks, of political wrangling to form a government and potentially a change of leader.

Ishiba's Liberal Democratic Party (LDP) and its junior coalition partner Komeito took 215 seats in the lower house of parliament, down from 279 seats, as voters punished the incumbents over a funding scandal and a cost-of-living crunch. Two cabinet ministers and Komeito's leader, Keiichi Ishii, lost their seats.

The biggest winner of the night, the main opposition Constitutional Democratic Party of Japan (CDPJ), had 148 seats, up from 98 previously, but also still well short of the 233 majority.

Voter turnout was 53.81 per cent, according to Kyodo News Agency estimates, down about two per cent from the previous election in 2021.

As mandated by the constitution, the parties now have 30 days to figure out a grouping that can govern, and there remains uncertainty over how long Ishiba - who became premier less than a month ago - can survive after the drubbing. Smaller parties also made gains and their role in negotiations could prove key.

"Whether or not Prime Minister Shigeru Ishiba resigns as LDP leader today, it seems unlikely that he will survive to lead a new government as prime minister ... though it is possible he could stay on as caretaker," said Tobias Harris, founder of Japan Foresight, a political risk advisory firm.

Ishiba, picked in a close-fought race to lead the LDP late last month, called the snap poll a year before it was due in an effort to secure a public mandate.

His initial ratings suggested he may be able to capitalise on his personal popularity, but like his predecessor Fumio Kishida he was undone by resentment over his handling of a scandal involving unrecorded donations to LDP lawmakers.