Japan’s Opposition Weighs Cooperation On Tamaki Bid For Premier

Japan’s main opposition parties are likely to meet Tuesday as they weigh the possibility of rallying behind Yuichiro Tamaki as a unified candidate to take on ruling party leader Sanae Takaichi in a parliamentary vote to decide the prime minister.Following the shock collapse of the ruling coalition on Friday after an alliance lasting 26 years, the prospects for the ruling Liberal Democratic Party’s new leader Takaichi becoming premier have become increasingly murky.

The LDP has 196 seats in the more powerful lower house, the largest bloc, but if the three main opposition parties coalesce behind a single candidate they would have 210. That would be enough to secure the premiership, provided other parties outside the LDP don’t back Takaichi.Tamaki is the leader of the Democratic Party for the People, a small populist party that has grown quickly in popularity based on clear messaging and a promise to raise people’s take-home pay. With inflation topping voters’ list of concerns, the DPP’s strategy has resonated with households struggling with rising prices.

“I have the determination to become prime minister,” Tamaki said in a post on X last week. If he succeeded, that would be the first time the LDP was booted out of the government since 2009.There is also 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.

Tamaki will need to win the backing of key opposition parties to stand a chance of victory and that will require overcoming differences on policy. There is a fair amount of common ground. The Constitutional Democratic Party, the Japan Innovation Party (Ishin) and the DPP agree on the need to help households cope with inflation. All fought the upper house election with pledges to reduce the sales tax temporarily, though their proposals differed.Tamaki has pointed to defense as a key issue that divides his party from the CDP, saying those differences must be overcome for any cooperation.

The CDP holds 148 seats in the lower house, the Japan Innovation Party (Ishin) has 35, and the DPP controls 27. Komeito, the party that bolted from the coalition on Friday, has 24. So if all four parties ended up collaborating on an administration, they would get just over the threshold of 233 seats to give them a majority of 234 seats.

“Neither a Takaichi government nor a Tamaki government is stable,” Pelham Smithers, managing director of UK-based Japan equity research firm Pelham Smithers Associates, wrote in a note. “Ironically, political turmoil is not a negative for the stock market, if anything, it is a positive. A political crisis basically forces the BOJ onto the sidelines, and in turn exacerbates the ‘behind the curve’ element,” he added.

As the opposition parties eye cooperation, Takaichi continues to lay the groundwork for the possibility of becoming prime minister. She is considering tapping main LDP rival and Agriculture Minister Shinjiro Koizumi as defense minister, and Chief Cabinet Secretary Yoshimasa Hayashi as internal affairs minister, according to the Yomiuri newspaper.

Source: Bloomberg Europe