Japan PM Ishiba vows to take responsibility for election loss, to stay in office to deal with US tariff talks

TOKYO - Japanese Prime Minister Shigeru Ishiba vowed to remain in office on July 21 after his ruling coalition suffered a bruising defeat in Upper House elections, prompting some of his own party to deliberate his future as the opposition weighed a no-confidence motion.

The embattled Premier told a news conference he would remain in office to oversee

tariff talks with the US

and other pressing matters such as rising consumer prices that are straining the world’s fourth-largest economy.

“I will stay in office and do everything in my power to chart a path towards resolving these challenges,” Mr Ishiba said, adding that he intended to speak directly to US President Donald Trump as soon as possible and deliver tangible results.

The 68-year-old veteran Liberal Democratic Party (LDP) lawmaker also acknowledged his “heavy responsibility” for the election outcome, but said he would fulfil his responsibility for the people who made the LDP the largest force in Parliament.

Mr Ishiba said he has no plans to change the LDP’s leadership in the wake of the election setback. But he added that he would consider whether to reshuffle the line-up of LDP executives when their current terms end in September, as well as a revamp of his Cabinet.

Analysts say his days may be numbered, having also lost control of the more powerful Lower House in elections in 2024, and shedding votes on July 20 to opposition parties pledging to cut taxes and tighten immigration policies.

“The political situation has become fluid and could lead to a leadership change or the reshuffling of the coalition in the coming months, but Prime Minister Shigeru Ishiba will likely stay to complete the tariff negotiations with the US for now,” said Oxford Economics lead Japan economist Norihiro Yamaguchi.

Investors fear his administration, which is facing a voter backlash over rising consumer prices, will now be more beholden to opposition parties advocating tax cuts and welfare spending that the world’s most indebted country can ill afford.

Markets in Japan were closed for a holiday on July 21, although the yen strengthened and Nikkei futures rose slightly, as the election results appeared to be priced in.

Yields on Japanese government bonds sold off sharply ahead of the ballot as polls showed the ruling coalition – which had been calling for fiscal restraint – was likely to lose its majority in the Upper House.

Adding to the economic anxiety, Mr Ishiba’s lack of progress in averting tariffs set to be imposed by its biggest trading partner, the US, on Aug 1 appears to have frustrated some voters.

“Had the ruling party resolved even one of these issues, (its approval rate) would have gone up, but we didn’t feel anything, and it seems like the US would continue to push us around,” said Mr Hideaki Matsuda, a 60-year-old company manager, outside Tokyo’s bustling Shinjuku station on the morning of July 21.

Japan’s chief tariff negotiator Ryosei Akazawa departed for trade talks in Washington on the morning of July 21, his eighth visit in three months.

Populist politics

Mr Ishiba’s LDP, which has ruled Japan for most of its post-war history, and coalition partner Komeito returned 47 seats, short of the 50 seats it needed to ensure a majority in the 248-seat Upper Chamber in an election where half the seats were up for grabs.

The leader of the main opposition Constitutional Democratic Party of Japan (CDPJ), Mr Yoshihiko Noda, said on July 20 that he is considering submitting a vote of non-confidence in the Ishiba administration as the result showed it did not have voters’ trust. The CDPJ returned 22 seats in the ballot, finishing second.

Some senior LDP lawmakers were also quietly voicing doubts over whether Mr Ishiba should stay, according to local media reports on July 21.

Among them was former prime minister Taro Aso, leader of a powerful faction within the ruling party, who said he “couldn’t accept” Mr Ishiba staying on, Japan’s TV Asahi reported.

Senior party members including Mr Aso met on the evening of July 20 to discuss whether Mr Ishiba should resign, the Sankei newspaper reported.

The far-right Sanseito party

clocked the biggest gains of the night, adding 14 seats to one elected previously.

Launched on YouTube during the pandemic by spreading conspiracy theories about vaccinations and a cabal of global elites, the party found wider appeal with its “Japanese First” campaign and warnings about a “silent invasion” of foreigners.

Dragging once-fringe rhetoric into the mainstream, its success could mark the arrival of populist politics in Japan, which until now has failed to take root as it has in the US and western Europe.

Sanseito’s party leader Sohei Kamiya, a former supermarket manager and English teacher, has previously pointed to Germany’s AfD and Reform UK as a possible blueprint for future success.

Debate on sales tax cut

Mr Ishiba on July 21 stressed the need to establish a common understanding among parties on the pros and cons of cutting the country’s sales tax rate.

Cutting the sales tax could increase household income temporarily, but would raise questions on how to pay for Japan’s ballooning social welfare and pension costs, Mr Ishiba told a news conference.

“There needs to be a common understanding over the facts” on the pros and cons of a sales tax cut, he said. “Just looking at one side of the debate won’t do,” he added.

The Premier has repeatedly brushed aside calls from opposition parties to cut Japan’s sales tax rate, currently set at 10 per cent except for an 8 per cent levy on food products.

At the news conference, Mr Ishiba urged other parties to join discussions on how to cushion the blow from rising inflation, while being mindful of the responsibility to keep Japan’s fiscal house in order. REUTERS, KYODO NEWS