Japan faces political uncertainty after ruling party loses majority in election

Japan's ruling Liberal Democratic Party (LDP) lost its majority in the lower house election on October 27, 2024. This outcome leaves Prime Minister Shigeru Ishiba's government in a weakened position as parties now have 30 days to form a coalition. Analysts suggest Ishiba may have a short tenure, with concerns about a potential return to frequent changes in leadership. The exact structure of any coalition remains uncertain, impacting the country's economic policy direction. Despite the challenges, some experts believe a coalition could still be formed, allowing for continuity in policies like renewable energy investment and social spending. However, significant changes in defense policy are not expected.