On October 27, Japan held general elections, with results signaling an eventual--if not immediate--change of government. However, this shift is unlikely to bring significant changes in foreign policy, security, or economic direction-----

On October 27, Japan held elections for the House of Representatives (Lower House). The ruling coalition, comprised of the Liberal Democratic Party (LDP) and Komeito, suffered a severe defeat, losing its majority. Pre-election, the LDP held a robust 261 seats out of 465 but emerged from the election with only 191 seats, while Komeito also saw significant losses, including the defeat of its party leader.

Reasons for the LDP's Defeat

The LDP's main setback likely stemmed from a scandal involving tax evasion on money collected through fund-raising events. Although small in scale compared to campaign funding in the U.S. or Russia, Japanese media widely reported this as misconduct. With inflation hitting Japan hard due to the yen's devaluation, the public viewed tax evasion by politicians as intolerable.
This issue was first reported by Communist-affiliated media last fall and gained traction after Asahi Shimbun, a major liberal outlet, followed up, igniting a year-long controversy. In August, Prime Minister Kishida announced he would not run in the next LDP leadership election, signaling an effective resignation, and in the subsequent leadership race on September 27, Shigeru Ishiba was elected.
His main opponent, Ms. Sanae Takaichi, advocated for a hardline stance on China and South Korea and a continued fiscal easing policy. Ishiba had the backing of former Prime Minister Suga, while Takaichi was supported by former Prime Minister Aso, giving the election the feel of a proxy battle between Suga and Aso.

Before facing intense questioning in parliament on the political funds issue, and with opposition parties consolidating candidates in single-member districts, Ishiba's administration decided to call an election--which they lost. When parliament reconvenes to elect a new Prime Minister (in which all members vote, and the leader of the ruling coalition is typically chosen), Ishiba may lack the majority needed. If opposition members rally behind Noda, leader of the Constitutional Democratic Party, and a few LDP or Komeito members defect, Noda could emerge as Japan's next Prime Minister even in coming November.

Japanese Politics Shifts from Rural to Urban Priorities

In the past, the LDP retained a majority despite scandals, largely due to rural areas' strong influence. Local politicians, supported by agricultural cooperatives, construction companies, physicians, postal workers and etc., wielded significant control in elections. However, as Japan urbanized, more people moved away from local interests, and today 40% of voters do not align with any specific party, reflecting Japan's increasingly genuine democracy--though at times susceptible to populism.

An Inevitable Noda Administration?

The LDP now resembles the Titanic post-collision; while it may not sink immediately, a change of government within a year is likely. The earliest point of collapse could occur, as I said above, if the LDP loses in November's Prime Minister election in the Parliament. Another key juncture will be next January's parliamentary session to approve the fiscal year 2025 budget, which includes a 40% defense budget increase planned under former Prime Minister Kishida. Funding this will require issuing government bonds, likely sparking fierce opposition scrutiny. The opposition, capitalizing on this and the political funds scandal, may seek to deadlock parliament, preventing the budget from passing and triggering another general election, where the LDP could lose power.

If Ishiba's administration wants to survive, it will need to make concessions in the budget to win the support of right-wing parties like the Democratic Party for the People and the Ishin Party. Even then, the summer upper-house elections could lead to further losses for the LDP-Komeito coalition, stalling any legislative progress and possibly forcing another general election.

Would a Noda Administration Change Japan?

Similar to 2009 when the Democratic Party of Japan (DPJ) replaced the LDP, public frustration has mounted against the old LDP-dominated political system. In 2009, the DPJ was a political unknown, but the public took a chance on it, although, as later criticized by former Prime Minister Abe, the administration lacked governing experience.
This time, the probable leader of a coalition government would be the Constitutional Democratic Party's (CDP) Noda, who served as Prime Minister in 2011~12 and was known for his cautious and capable leadership. He implemented a controversial tax hike to balance the budget and took a strong stance in defense of the Senkaku Islands, marking him as a conservative pragmatist comparable to the LDP.

In essence, voters seem to prefer a stable leader who is not LDP-affiliated but instills confidence. However, the CDP itself is a mix of factions, including former Socialist Party members and labor union-backed left-wing representatives, alongside moderate and conservative figures, often with bureaucratic backgrounds. Noda, notably, is part of the latter, with a self-defense force officer father.

Is Ishiba or Noda More Hawkish or Dovish?

Whether Ishiba or Noda becomes Prime Minister, Japan's foreign and security policies are expected to remain centered on the U.S. alliance. Ishiba has hinted at revising the U.S.-Japan Status of Forces Agreement and proposed an "Asian NATO" but appears willing to keep these discussions internal for now. Japan's stance toward China, South Korea, India, ASEAN, Russia, and the Middle East will likely remain consistent.

Since WWII, Japan has refrained from imperial expansion, and its people accept that Japan's global role is limited to economic and cultural influence. Unlike other nations, Japan has not turned to foreign adventurism to distract from domestic troubles. In recent years, Japan's presence in the consumer electronics market has waned, and competition from electric vehicle makers, particularly in China, is intensifying. However, Japanese firms maintain global competitiveness in components, materials, and manufacturing equipment for microchips.

Overall, Japan's political landscape is likely to experience volatility in the coming years, similar to other developed nations. Regardless of which party is in power, Japanese businesses are expected to carve their path forward.

Globally, wealth redistribution continues, spurred by China's integration into the world economy, which has fueled populism and political instability in many advanced countries. But Japan has a robust economic foundation, heavily centered on manufacturing, and a solid bureaucratic system rooted in lifetime employment (though recently, many younger bureaucrats have been leaving). This makes me think Japan is relatively resilient when it faces political instability.