Japanese Prime Minister Shigeru Ishiba on July 21 vowed to remain in office after his ruling coalition suffered a major defeat in upper house elections, even as some ruling party members questioned his leadership and the opposition considered a no-confidence motion.
Speaking at a press conference, Ishiba said he would stay on to oversee crucial tariff negotiations with the US and address rising consumer prices that are straining the world’s fourth-largest economy. He stressed he would speak directly with US President Donald Trump as soon as possible to deliver tangible results.
“I will remain in office and do everything in my power to solve these challenges,” he said.
US Treasury Secretary Scott Bessent told CNBC that Washington’s focus is on securing the best deal for Americans, not Japan’s domestic politics. A US State Department spokesperson described the US-Japan alliance as the “cornerstone of peace, security, and prosperity” and said it remains strong.
Analysts warned Ishiba’s political future is shaky, noting he already lost control of the lower house last year and shed votes this time to opposition parties promising tax cuts and tighter immigration. Oxford Economics’ lead Japan economist Norihiro Yamaguchi said: “The situation is fluid and could lead to a leadership change or coalition reshuffle.”
Investors fear Ishiba’s administration may face more pressure to adopt policies like tax cuts and welfare spending, despite Japan’s heavy debt burden. Ishiba said he has no plans to expand his coalition but will work with opposition parties on inflation concerns, cautioning that tax changes will not bring immediate relief.
Markets were closed for a holiday, but the yen strengthened and Nikkei futures rose slightly as results appeared priced in. Ahead of the vote, Japanese government bond yields swung sharply as polls predicted the ruling coalition would lose its upper house majority.
Frustration also stems from Ishiba’s lack of progress in averting US tariffs set for Aug 1. “If they had solved even one issue, approval would have gone up, but we saw nothing,” said 60-year-old company manager Hideaki Matsuda near Shinjuku Station.
The Liberal Democratic Party and Komeito secured only 47 seats, short of the 50 needed for a majority in the 248-seat chamber. The opposition Constitutional Democratic Party won 22 seats, and its leader Yoshihiko Noda is considering a no-confidence motion. Former PM Taro Aso was among LDP members questioning Ishiba’s continuation.
Ishiba responded, “It is natural to have differing opinions within the party.”
The far-right Sanseito party surged from 1 to 15 seats, riding on a “Japan First” platform and conspiracy-driven messaging, marking a breakthrough for populist politics in Japan.
