石破茂遭遇选举惨败，日元意外走高难掩经济衰退风险

Core Viewpoint - The recent loss of the ruling coalition led by Prime Minister Shigeru Ishiba in Japan's House of Councillors election marks a significant political setback, as it is the first time since the Liberal Democratic Party's (LDP) establishment in 1955 that it has failed to secure a majority in both houses of the National Diet [1][2]. Political Impact - The ruling coalition, consisting of the LDP and Komeito, lost its majority in the House of Councillors, with the opposition and independents securing 76 seats, reaching a total of 124 seats out of 248 [2][3]. - This election result is seen as a referendum on Ishiba's governance and Japan's economic policies, particularly in light of ongoing U.S.-Japan trade negotiations and rising inflation [1][2]. Economic Concerns - The political instability has led to significant market volatility, with fears of a "triple whammy" in stocks, bonds, and currency markets following the election results [2][6]. - Japan's long-term government bond yields surged due to market concerns over potential fiscal expansion beyond the government's capacity [1][6]. - The economic outlook is further complicated by rising inflation and the impact of U.S. tariffs, which have already led to a decline in Japan's exports to the U.S. [9][10]. Market Reactions - Following the election, the Japanese yen initially strengthened against the dollar, reflecting market adjustments to the political risk, although the overall trend suggests a potential depreciation of the yen due to fiscal expansion policies and external pressures [6][7]. - The Japanese stock market's future remains uncertain, with analysts suggesting that the loss of a majority may hinder the government's ability to implement effective economic policies, potentially dampening investor confidence [8][10]. Governance Challenges - Analysts indicate that Ishiba's administration faces significant challenges in policy implementation, particularly regarding tax cuts and social security issues, amidst a backdrop of declining public support [3][5]. - The political landscape is shifting towards a more fragmented system, which may complicate long-term economic reforms and exacerbate existing structural issues within Japan's economy [5][9].