Japan's shock general election

The government's defeat was predicted by opinion polls just before the October 27th election, but was not at all the outcome expected when the snap election was called

Japan is a remarkably safe, stable and comfortable place, but it sits in a dangerous part of the world, right next to China, North Korea and Russia. That makes it important to European allies and above all to its closest ally, the United States, as a liberal leader countering China and Russia in Asia. Yet its stability cannot be taken for granted. Even Japanese voters can get angry and disillusioned, as they showed in a shock and destabilising result in Sunday’s general election.

In the election the country’s long ruling conservative coalition lost its parliamentary majority, while the opposition parties showed new energy and coherence. This wasn’t supposed to happen: a new prime minister, Shigeru Ishiba, who had made a career out of being a maverick outsider, called a snap election to exploit his apparent personal popularity. Now, having been in office for less than a month, Japanese commentators are comparing him insultingly with Britain’s Liz Truss, the Conservative who in 2022 famously survived for just 45 days as prime minister.

In truth, this is the sign of a healthy democracy, but it is an election result that holds lessons for other rich countries. It also leaves a key American security ally lacking a government just ahead of America’s own, rather momentous, election. Japanese governments are normally formed within hours or at most days, but forming this one could take weeks or months.

The parliamentary arithmetic is difficult. In the 465-seat House of Representatives, a party or coalition needs 233 for a simple majority, but Ishiba’s Liberal Democratic Party fell in the election to just 191 seats while its coalition partner since 2012, Komeito, fell to 24, giving them a combined total of just 215, way down on the 279 the coalition held before the vote. There are 12 independents, many of whom were kicked out from the LDP over financial scandals, but even if all those were readmitted the coalition would fall short.

Under Japanese law, a special session of parliament must be held within 30 days after an election to choose a new prime minister, and hence government, although the vote is expected to be scheduled sooner, on November 11th. So Ishiba now has less than two weeks to persuade one of the other small parties to support him in that vote. If he fails to win the vote, an opposition leader may be able to cobble together an interim government, though that too looks a tall order. The likely outcome, whatever happens on November 11th, is a fresh set of elections in the first half of 2025. At the latest, this might coincide with elections scheduled for the House of Councillors, Japan’s less powerful upper house of parliament, by July at the latest.

The big lesson for other rich countries of Japan’s political earthquake is that inflation matters more to voters than it does to many economists. For more than three decades, Japanese have become used to stable or even falling prices, a deflationary trend that reflected economic stagnation but at least made things predictable for ordinary citizens. Their incomes were depressed, but prices were dependably low. Two years ago, following Vladimir Putin’s invasion of Ukraine, this changed.

To economists, the inflation Japan has experienced since 2022 has looked moderate, or even welcome, given that as well as high energy prices and a falling currency it also appeared to reflect a new corporate dynamism. Wages started to rise faster too. But they were outpaced by prices. People felt poorer.

Most importantly, for a crucial block of long-time supporters of the conservative Liberal Democratic Party incomes did not move at all: nearly 30% of the Japanese population is now over the age of 65, of whom most depend on pensions which have not kept pace with inflation. This is a lesson from the 1970s that many had forgotten: inflation is especially cruel to those on fixed incomes. Older voters are likelier to turn out to vote than younger ones, and they can get angry too.

This concern about inflation coincided with financial scandals in the Liberal Democratic Party: not surprisingly, many voters concluded that the ruling party was doing little to help them while pocketing money for itself. This conservative party, essentially a Japanese equivalent of Italy’s Christian Democrats, has ruled Japan ever since 1955, except for two short periods in the early 1990s and in 2009-12. It had shrugged off countless numbers of financial scandals in the past. But this time the blend of scandal and inflation has proved its undoing.

The question, as always after political earthquakes, is whether the old conservative government can now rebuild itself and repair its image, or whether this will be the start of a more sustainable change. The Liberal Democratic Party remains the largest party in parliament, but it now faces a difficult choice. It can try to soldier on under its current leader, for want of anything better, or — probably once he has failed to form a stable government — get rid of him and consider switching to one of the more obvious “change” candidates who lost out to him in the LDP’s September leadership election: Sanae Takaichi, a right-winger who would offer herself as Japan’s first female prime minister, or Shinjiro Koizumi, son of the popular Junichiro Koizumi who was prime minister in 2001-06, and who at just 43 years old would stand to be Japan’s youngest postwar prime minister (the previous youngest was Shinzo Abe at 52 years old in 2006) and thus to represent a new generation.

This matters to Europe and America for two main reasons. The first is that western efforts to deter China from invading Taiwan depend critically on Japan’s plans to double its defence spending by 2027. The financing of that build-up will be harder without a stable government majority. There is a broad cross-party consensus that Japan’s national security requires such a defence build-up, but no consensus about how to pay for it.

The second is that if Donald Trump is elected as US president on November 5^th and carries out his promise to launch a trade war against Europe and Japan, Europe will need a dependable and resolute Japanese partner in resisting that American economic aggression, but it might not get one.

This commentator continues to bet that Kamala Harris will in fact win the US election, boosted by a strong turnout among her party’s voters and enough revulsion among traditional Republicans against Trump. But the Japanese lesson must be borne in mind for it touches one of her main weaknesses by virtue of having been vice-president for the past four years: that inflation matters a lot to voters.