Political Shake-Up: Japan's Ruling Coalition Faces Uncertainty

Japan's ruling coalition risks losing its parliamentary majority, as exit polls indicate a grim outlook for Prime Minister Shigeru Ishiba's party. The loss could result in a shift of power to the opposition, potentially triggering political instability amid economic and security challenges. Stocks and the yen are expected to be impacted.

Japan's ruling coalition is teetering on the brink of losing its parliamentary majority, according to exit polls from Sunday's general election. The polls point to significant losses for Prime Minister Shigeru Ishiba's Liberal Democratic Party (LDP) and its partner Komeito, potentially paving the way for the opposition's resurgence.

Facing voter backlash over a funding scandal and rising inflation, the coalition is projected to capture only 198 of the required 233 seats, marking its worst performance since 2009. The opposition Constitutional Democratic Party of Japan (CDPJ) is poised to gain ground with 157 seats, complicating Japan's political landscape.

As Ishiba grapples with potential power-sharing negotiations, the outcome may destabilize Japan further, compounding economic and geopolitical pressures. Markets reacted negatively, with shares and the yen declining, reflecting investor apprehension over the coalition's uncertain future.

(With inputs from agencies.)