Japan’s long-standing ruling coalition disintegrated on October 10, 2025, after its junior partner, the Komeito party, quit the alliance with the Liberal Democratic Party (LDP). This dramatic political fallout throws into question the chances of Sanae Takaichi becoming Japan’s first female prime minister, a bid she had embarked upon after becoming LDP leader just days earlier.
Komeito's leader, Tetsuo Saito, cited dissatisfaction with the LDP’s handling of a political funding scandal as the primary reason for the split. The party expressed that the failure of the LDP to provide clear and concrete responses made it impossible to back Takaichi’s nomination. Despite this, Komeito pledged continued support for budgetary and other legislative measures already in progress.
The coalition breakup ended a partnership that had governed Japan with only brief interruptions for over 25 years. LDP now faces the challenge of securing a majority in parliament without the support of Komeito, needing allies from other parties to pass legislation and approve a new prime minister.
Takaichi, known for her conservative politics and viewed as a protégé of late Prime Minister Shinzo Abe, expressed regret over the coalition's collapse but affirmed her determination to continue seeking parliamentary endorsement. The setback comes amid a broader political crisis triggered by voter dissatisfaction over inflation and a recent LDP funding controversy, further complicating Japan’s leadership landscape.
This political turbulence has unsettled financial markets, reflected in the yen’s fluctuations and investor uncertainty about Japan’s economic prospects.