The Takeaway
Japan’s upper house election on July 20 dealt a historic blow to the ruling Liberal Democratic Party (LDP) and its junior partner, Komeito, as they lost majority control of the Diet’s upper chamber. Of the 125 contested seats, the coalition won just 47, while opposition parties — led by the centre-left Constitutional Democratic Party (CDP) — secured 78 by tapping into public frustration over the rising cost of living and a worsening tariff climate.
The far-right Sanseito party also made unexpected gains, winning 14 seats on an anti-immigration, “Japanese First” platform. Japanese Prime Minister Ishiba Shigeru, already weakened by last year’s lower house loss, acknowledged the “harsh result” but vowed to remain in office.
The election became a referendum on the government’s economic management — including the stalled negotiations on tariffs with the United States — with voters supporting parties that pledged immediate tax relief.
In Brief
- In its worst performance since the late 1990s, the LDP-Komeito coalition fell short of the 50 (out of 125 contested) seats needed to retain a simple majority. Having already lost the lower house in October 2024 for the first time since 2009, the coalition’s latest setback further weakens Ishiba’s minority government and heightens uncertainty over its future.
- The far-right Sanseito party surged from a single seat to an unexpected 14 seats in the upper house. The party, founded on YouTube by spreading conspiracy theories during the COVID-19 pandemic, has broadened its appeal by campaigning on a nationalist “Japanese First” agenda and “stricter rules and limits” on immigration. Its warnings of a “silent invasion” by foreigners and claims about foreigners’ abuse of Japan’s public health system resonated with a segment of the electorate, pushing previously obscure views into the mainstream. These concerns gained further traction amid Japan’s growing foreign resident population, the majority of whom come from nearby Asian countries such as China, South Korea, and Vietnam.
- Despite the setback, Ishiba will remain in office, arguing that the LDP must uphold its responsibility to the nation “as the No. 1 party by comparison.” However, he is expected to face intense pressure to resign.
Implications
Opposition gains are driven by economic grievances. With voter turnout at 58.05 per cent — higher than the 52 per cent in the 2022 upper house election — the outcome signals that voters reject the status quo and are nervous about the country’s economic malaise, elevating new forces that could reshape domestic and foreign policy. The main opposition, the Constitutional Democratic Party (CDP), secured 22 seats. Other opposition parties capitalized on widespread frustration over soaring consumer prices. For instance, the price of rice has roughly doubled since 2024. The CDP campaigned on promises of “zero consumption tax on food products” and expanding welfare spending to ease household burdens. This resonated with voters, in contrast to the LDP’s stance of fiscal restraint and its refusal to cut the consumption tax.
The appeal of “Japan First” rhetoric signaled a rightward tilt in the electorate. Although foreign residents make up only about three per cent of Japan’s population, public concerns over the increase in foreign ownership of real estate and the growing presence of migrant workers have intensified in recent years. Sanseito’s electoral gains brought these once-marginal issues into the mainstream, reflecting a shift in discourse around immigration and national identity debates. The party’s success has pressured the LDP to address voter anxieties over social change, even as more moderate voices warn that leaning too far right could alienate centrist supporters.
What’s Next
1. Leadership, governance in limbo
The outcome leaves Japan with a divided Diet and casts serious doubt on Ishiba’s leadership and longevity. While he has so far avoided resignation, analysts note that such a decisive loss could still easily force him out. Even if he remains in office, his minority government will need to seek opposition support to pass legislation, likely resulting in policy compromises, particularly on fiscal matters. The political uncertainty raises the risk of prolonged gridlock — or even an early general election if governance becomes untenable. Compounding the pressure, Japan faces an August 1 deadline to reach a trade deal with the U.S. to avoid steep tariffs on its exports.
2. Canada-Japan ties will likely stay stable amid uncertainty
Japan’s election upheaval is unlikely to undo the recent advancements made in the Japan-Canada partnership. Canadian Foreign Minister Anita Anand’s July 8 visit to Tokyo marked a milestone in bilateral relations, with the signing of the Canada–Japan Security of Information Agreement (SIA). The legally binding pact enables the secure sharing of classified defence technologies, cyber threat data, and operational intelligence, and signals a new level of institutionalized co-operation between the two countries. Pending ratification, the SIA strengthens Canada’s Indo-Pacific profile and reinforces its G7 presidency agenda of offering a “viable alternative” to global instability.
For Japan, the signing of the SIA with Canada expands its security collaboration beyond the U.S. while still integrating it more closely with the Western intelligence community. As both countries navigate rising regional threats and shifting global alignments, the agreement underscores a shared commitment to a stable, rules-based Indo-Pacific order. Japan’s election results, then, are less a rupture than a reminder of the domestic constraints its leaders face. While Ottawa can expect Tokyo’s short-term focus to remain on internal economic relief, Japan will continue to partner with Canada on regional security, G7 unity, and trade — areas where both countries’ interests clearly align.
• Edited by Ted Fraser, Senior Editor, and Vina Nadjibulla, Vice-President Research & Strategy, APF Canada
