In the Japanese election on Sunday, the ruling coalition—the Liberal Democratic Party (LDP) and its junior partner Komeito—lost its majority in the upper house of the Diet, or parliament. It was the second blow to the government, which lost its majority in the lower house in national elections held last October. The election was to replace half of the upper house legislators who serve for six years.
In the past, one election loss has usually led to the prime minister making a public apology and resigning. However, Shigeru Ishiba has not resigned and has declared that he will continue in office. He declared on Monday that, as the largest parliamentary party, the LDP had “a responsibility to prevent politics from stagnating or drifting,” amid global uncertainty.
While global issues were largely excluded from the election campaign, the most obvious remain Trump’s huge trade tariffs and demands that Japan make further major increases in military spending. Yesterday, the government reached a trade deal with the US that reduced the threatened tariff rates, but agreed to boost US imports, including of rice. Prior to the election, Ishiba had flatly rejected rice imports, fearing a backlash particularly among the LDP’s voter base in rural areas.
The LDP has only been able to remain in office as a minority government as a result of the deep divisions among the opposition parties—between the far-right and the nominally liberal parties. The two parties that made significant gains in the upper house election—the fascistic Sanseito party and the conservative Democratic Party for the People (DPP)—did so on the basis of populist appeals and demagogy aimed at voters hit hard by inflation, low wages and job security.
Sanseito, established just five years ago, increased its seats from one to 15. It openly ran a Trump-style campaign focussed on whipping up anti-immigrant xenophobia, by blaming foreigners for every social ill from low wages and crime rates to rising property prices to dangerous driving. Its racialist propaganda accuses foreigners of diluting Japan’s cultural “purity.”
Sanseito’s leader, 47-year-old Sohei Kamiya, is a former army reservist, English teacher and supermarket manager who was a member of the LDP. He established Sanseito in 2020 and, with the onset of the COVID-19 pandemic, promoted anti-vaccine conspiracy theories. During the 2022 campaign for the upper house, during which the party won its first seat, he engaged in a fascist, antisemitic rant against “Jewish capital.”
Kamiya criticises women’s participation in the workforce and calls for a cultural return to traditional gender roles. Sanseito’s policies include a universal monthly child benefit payment of 100,000 yen ($US670) to encourage larger families, along with tax cuts and repealing the LGBT Understanding Promotion Act.
However, the party’s chief focus is an anti-foreigner agenda including curbs on immigration, stopping welfare payments to non-Japanese residents and restricting land ownership for foreigners.
Last week, eight non-governmental organisations issued a joint statement warning against “rapidly spreading xenophobia.” It continued: “The argument that ‘foreigners are prioritized’ is totally unfounded demagoguery.” More than 1,000 organisations subsequently supported the statement.
Unlike Sanseito, the DPP is not a far-right party, but it did make a definite populist pitch to widespread discontent and anger over deteriorating living conditions. The DPP emerged from the break-up of the Democratic Party of Japan, forming in a split in 2018 from the Constitutional Democratic Party of Japan (CDP), the largest opposition party. It won 17 seats in Sunday’s election, bringing its total in the upper house to 22.
In the lower house election last year, the DPP quadrupled its seats to 28 and become the fourth-largest party. The DPP campaigned against the ruling LDP coalition and the opposition CDP, but has assisted the minority Ishiba government to pass legislation in the lower house.
DPP leader Yuichiro Tamaki studied law at the elite University of Tokyo, after which he joined the Ministry of Finance and spent a year at Harvard. He declares that he is “neither left nor right” and postures as the defender of the working-age population whose disposable income has barely increased in decades. Tamaki criticised the country’s so-called “silver democracy”—the over-65s that make up nearly 30 percent of the population and are proportionately more likely to vote.
In an appeal to disadvantaged and disenchanted voters, the DPP’s central election slogan was “increase take-home pay.” Tamaki’s policies include slashing the unpopular consumption tax and introducing “education bonds” to fund spending on children and social programs.
While Tamaki distances himself from anti-foreigner xenophobia, saying that it only appeals because “people feel left behind and are starting to blame foreigners,” he nevertheless supports legislation to restrict land acquisition by foreigners. He also supports the militarist agenda of expanding the armed forces carried out by the government, which is in the process of doubling military spending to 2 percent of GDP.
The growth of Sanseito and the DPP reflects a generational divide. An exit poll by Kyodo News last Sunday found that half of men and women under the age of 40 reported voting for those parties. Among men and women over 60, the numbers reversed, with half voting for the main establishment parties—the LDP and CDP.
The New York Times also reported that another poll found strong support for the two populist parties among members of the so-called “Ice Age” generation, which refers to those who entered the workforce in the aftermath of the implosion of Japan’s share market and property bubbles in 1989–90. The subsequent protracted economic stagnation, lasting into the early 2000s, left many of the estimated 17 million graduates who entered the workforce without permanent employment and condemned to low paid temporary and part-time jobs. As the economy recovered, they were passed over as corporations employed young graduates.
The workforce as a whole is now being hit by economic slowdown, inflation and falling real wages. Last year, Japan’s GDP grew by a minuscule 0.1 percent and declined by 0.2 percent in the first quarter of this year. Estimated GDP growth for 2025 is just 0.6 percent, but the real result could be lower because Trump’s tariffs, which come into effect on August 1, will hit the auto industry hard as well as the economy as a whole.
Inflation is compounding social distress. A Lowy Institute article pointed out that staple rice dramatically increased in price. In May, a five-kilogram bag of rice cost 4,268 yen ($29.90), nearly doubling from 2,228 yen a year before. A survey late last year by Save the Children Japan found that a third of low-income families were reducing their rice consumption due to rising prices.
The fragmentation and instability of the Japanese political establishment derives from economic stagnation that began in the early 1990s, along with the deepening divide between rich and poor and growing social tensions. Previously, the LDP had ruled continuously since it was formed in 1955, and the opposition was dominated by the Japanese Socialist Party and Japanese Communist Party.
The Japanese Socialist Party no longer exists. It faded into oblivion after joining a grand coalition government with its long-time rival the LDP in 1994–96 and implementing the LDP’s pro-business policies. While some factions joined dissident LDP groupings to form the Democratic Party of Japan, the remainder renamed themselves the Social Democratic Party, which won just one seat in Sunday’s upper house elections.
The Stalinist Communist Party long ago abandoned its anti-capitalist pretensions under the guise of adopting the parliamentary road to socialism. It functions as part of the Japanese political establishment as the de-facto ally of the CDP, steeped in nationalism and advocating a mixture of social reforms and pacifism. In Sunday’s election, it lost four seats, reducing its total in the upper house to just seven.
In the absence of a genuine socialist and revolutionary alternative, populist parties of the right and extreme right have been able to capitalise on widespread disaffection and opposition. They have been encouraged by sections of the ruling class who fear the growth of working-class opposition to deteriorating social conditions and the emergence of trade war and military conflict.
Ishiba and the LDP remain in power, but the future of both is highly uncertain. Ishiba, who is regarded as a moderate within the right-wing LDP, faces opposition from the party’s right wing who had backed former Prime Minister Shinzo Abe. Moreover, the LDP itself, lacking a majority, could face a no-confidence vote and survives only due to the present lack of a credible alternative. Amid rising global geo-political conflict and economic crisis, all of this foreshadows further political upheavals in Tokyo.