Japan’s Komeito party has announced it will withdraw from its coalition with the Liberal Democratic Party (LDP), as newly elected leader Sanae Takaichi awaits a parliamentary vote to confirm her as Japan’s first prime minister, which is now in peril.
Tetsuo Saito, Komeito party leader, told party members on Friday that the 26-year partnership had broken down over an “inadequate” explanation by the LDP of its handling of a political funding scandal that has roiled the ruling group.
He said Komeito would not back Takaichi in the parliamentary vote expected later this month. In response, Takaichi said the collapse of the country’s ruling coalition was “extremely regrettable”.
“We have cooperated over the last 26 years, including when we were out of power. That this relationship is coming to such a conclusion is extremely regrettable,” the head of the LDP said of its junior partner Komeito.
Takaichi, who the LDP picked as its new leader on Saturday and skews to the right wing of the party, is now 37 seats short of a majority in parliament’s lower house. Without Komeito, she will need the backing of at least two other parties to pass legislation.
Opposition parties can put forward their own candidates when parliament meets to vote on the next premier.
Any candidate who secures a simple majority in the first round wins approval. If not, the two candidates with the most votes go into a run-off.
The LDP also has a minority in the less powerful upper house of parliament. It has governed Japan for most of the post-war period.
Takaichi’s selection as LDP leader last week dampened market expectations for a near-term interest rate hike, sending stocks higher and weakening the yen.
She is known for her staunch support of former Prime Minister Shinzo Abe’s “Abenomics” stimulus policies.
Komeito’s departure could trigger an unwinding of the so-called “Takaichi trade,” which had been driven by investor optimism about fiscal stimulus.
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