Japan’s ruling coalition under Prime Minister Shigeru Ishiba has lost its majority in the upper house of parliament following Sunday’s elections, dealing a heavy blow to his embattled government already weakened by defeat in last year’s lower house elections.

Projections from Japanese media and official tallies indicate Ishiba’s Liberal Democratic Party (LDP) and its coalition partner Komeito secured only 41 of the 125 contested seats, far short of the 50 needed to retain control of the 248-member chamber. With opposition parties gaining ground, Ishiba’s coalition now finds itself in the unprecedented position of being a minority in both houses.

Economic Crisis Fuels Voter Backlash

The election was shaped by widespread voter frustration over a cost-of-living crisis, with core inflation at 3.3% and wages stagnating for months. Real wages fell nearly 3% in May, compounding the pressure on households already grappling with soaring rice prices and weak government measures to alleviate the burden. Ishiba’s strategy of cash handouts and fuel subsidies failed to sway voters.

"I am more worried that wages aren’t rising than the cost of rice itself," one Tokyo voter said, reflecting broader discontent with Ishiba’s economic management.

Rise of Populist and Anti-Immigration Parties

The right-wing Sanseito party, running on a "Japan First" platform opposing immigration and globalization, surged in the polls, securing between 10 and 22 seats — a dramatic rise from just two seats previously. The party has capitalized on growing resentment over foreign investment in Japanese real estate and cultural tensions linked to rising numbers of foreign workers and tourists.

"I wanted to vote for a party focused on Japanese people and middle-class needs," said a Sanseito supporter, citing frustration over Chinese investors profiting from Japanese property markets.

Political Consequences for Ishiba

Ishiba, who has been in office for less than a year, now faces mounting pressure to resign. Analysts warn the government may enter uncharted political territory, with fragmented opposition and no clear path to legislative stability. Japan has not faced such a parliamentary deadlock since World War II.

Amidst this crisis, Ishiba’s aggressive stance in trade talks with the U.S., particularly his hardline demands to eliminate tariffs, has failed to deliver results, further undermining his credibility as economic fears grow.