没有预期那么糟！花旗：日本可能维持“少数派政府”执政的局面

Core Viewpoint - The recent Japanese Senate election results indicate a significant political shift, with the ruling coalition of the Liberal Democratic Party (LDP) and Komeito losing its majority, yet the market reacted positively, with both the yen and Nikkei futures rising [1][2]. Short-term Outlook - The LDP and Komeito coalition lost their majority in the Senate for the first time since the LDP's establishment in 1955, falling short by three seats [2]. - Despite the disappointing results, the situation is not as dire as some had feared, allowing the LDP to potentially continue governing as a minority [2][5]. Political Dynamics - Prime Minister Kishida plans to remain in power, citing national crises such as tariff negotiations and high prices, despite internal calls for accountability [4]. - All major opposition parties currently refuse to form a coalition government with the LDP, indicating a challenging political landscape for the ruling party [4][6]. Future Political Developments - The likelihood of a snap election in the House of Representatives this year is low, as both the LDP and opposition parties face challenges in regaining or expanding their seats [5]. - The LDP may continue to operate as a minority government, collaborating with opposition parties on policies, although some parties may reconsider their positions over time [5][6]. Long-term Projections - There is increasing pressure on Prime Minister Kishida to resign, which could lead to a new LDP leadership election and potentially a dissolution of the House of Representatives [7]. - The election results reflect voter support for active fiscal policies and conservatism, suggesting a shift in the LDP's approach under new leadership [8]. - The political situation is expected to stabilize over the next three months, with potential implications for fiscal policy and the stock market, despite short-term risks [8].