In the recent upper house elections in Japan, Prime Minister Shigeru Ishiba's coalition suffered significant losses that may impact future economic measures.
Election Results and Their Consequences
Exit polls suggest the coalition will lose control of the upper house and end up in a minority in both chambers.
As markets are closed on Monday, the yen could reflect the fallout from the election results, as anticipated by traders.
Uncertainty Around the Coalition's Future
The Democratic Party for the People may emerge as a new ally for the coalition, advocating for a reversal of policy. Inside the LDP, Sanae Takaichi is seen as a potential replacement for Ishiba if he steps down.
Impact on Markets and the Economy
Should Ishiba resign, this added uncertainty could lead foreign investors to sell Japanese stocks and the yen. The bond market is expected to fluctuate with potential tax cuts requiring increased government borrowing.
The defeat of Ishiba's coalition in the upper house election poses additional economic risks for Japan, with political uncertainty likely exacerbating the situation.
