Sunday, December 22, 2024

Japan’s ruling party poised to lose power over scandals and soaring inflation

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The LDP has been in power for all but four of the last 69 years.

It lost power briefly in 1993, when a coalition of seven opposition parties formed a government that lasted less than a year.

In 2009, the LDP again lost power in a landslide, replaced for a chaotic three years by the centre-left Democratic Party of Japan.

The DPJ’s policy failures and its clumsy response to the 2011 Fukushima nuclear disaster allowed the LDP under Shinzo Abe to return to power in late 2012.

Stocks and currency fall predicted

Following Sunday’s results, Japanese stocks and the yen are expected to fall while longer-dated government bond yields are seen rising as investors react to the uncertainty.

“The voters’ judgement on the ruling bloc was harsher than expected,” said Saisuke Sakai, a senior economist at Mizuho Research and Technologies.

“Uncertainty over the administration’s continuity has increased, and the stock market is likely to react tomorrow with a sell-off, especially among foreign investors.”

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