Japan's Takaichi bids for new coalition to back her in PM vote

Yoshiaki Nohara and Sakura Murakami, Bloomberg News on Oct 15, 2025

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Japan’s ruling party leader Sanae Takaichi called on the leaders of an Osaka-based opposition party to back her in a parliamentary vote to decide the prime minister expected next week.

“We’re almost on the same page on basic policies,” Liberal Democratic Party President Takaichi said following a meeting in Tokyo with Hirofumi Yoshimura and Fumitake Fujita, the co-leaders of the Japan Innovation Party (Ishin).

Yoshimura confirmed that his party would vote for Takaichi if they can reach an agreement on policy, but added that it wasn’t clear if the two sides would agree, or what Ishin would do if they didn’t. If Ishin votes for Takaichi, she is almost certain to win the prime ministerial vote in parliament.

The talks come amid a flurry of activity among political parties following the shock collapse of Japan’s ruling coalition last week. Takaichi is working to save her chances of becoming the nation’s first female prime minister, while opposition parties see a chance to oust the ruling party if they can coalesce around a single candidate.

Before the Ishin leaders met Takaichi, Fujita met Yuichiro Tamaki of the Democratic Party for the People and Yoshihiko Noda of the Constitutional Democratic Party for their first three-way meeting since the demise of the ruling coalition.

The three opposition parties have enough combined seats in the powerful lower house of parliament to outnumber the ruling LDP. But if they cannot reach agreement to rally around one candidate or if one of the parties abstains or votes for the LDP, then Takaichi is poised to win.

While Tamaki has been floated as the candidate with the most potential to topple Takaichi in the vote, the talks between the LDP and Ishin leaders suggest he may now face an uphill battle to emerge as a united opposition candidate.

The three-way opposition talks ended with an agreement to continue negotiations at the secretary-general level to hash out differences in policy before making a final decision on whether there was enough alignment to back an alternative candidate to Takaichi. The previous day, Tamaki’s DPP sought a change in the CDP’s stance on security issues as well as nuclear energy.

Fujita said Wednesday that the three leaders hadn’t specifically discussed who might stand as a unified candidate, an indication that they are still some distance from reaching an agreement.

Lawmakers confirmed earlier Wednesday that the next parliamentary session will open on Oct. 21, though they did not agree on when the vote to pick the prime minister would happen. In that vote, candidates don’t need an outright majority to become prime minister. If no one receives more than 50% support, the top two candidates compete in a runoff. The lower house’s decision overrules the upper house in the event the two chambers choose different candidates.

Tamaki’s DPP has fewer seats in the lower house than CDP or Ishin, but its rising popularity, demonstrated in the past two national elections, makes Tamaki the leading candidate to challenge Takaichi.

Ishin’s additional 35 seats in the lower house would mean a coalition with the LDP, with 196 seats, would still be two seats short of a majority, but would put them comfortably ahead of any bloc formed by the CDP, DPP, and Komeito.

There is a precedent for multiple opposition parties unifying behind a single candidate to become premier despite the LDP having the biggest bloc in parliament. That happened in 1993, though the resulting government proved unstable, leading to the eventual return of the LDP to power.

For investors, either Takaichi or Tamaki would likely mean more government spending and pressure on the Bank of Japan to slow its path toward raising interest rates. While the instability might cause short-term falls in equities, the policy direction might then lift stocks, while feeding into a weaker yen and higher super-long yields with moves potentially larger in the case of a Tamaki-led administration.