Japan’s ruling Liberal Democratic Party (LDP) has decided to postpone the start of an extraordinary Diet session to October 20 or later, reflecting political uncertainty as efforts to renew its coalition with Komeito remain unresolved.
The delay follows failed talks between new LDP leader Sanae Takaichi and Komeito chief Tetsuo Saito on maintaining their long-standing governing partnership. The two met in parliament on Tuesday but ended discussions without an agreement, agreeing instead to continue negotiations in the coming days.
Komeito, which serves as the LDP’s junior coalition partner, has expressed unease over Takaichi’s leadership, viewing her as a staunch conservative whose policy positions could strain cooperation between the two parties.
The stalemate has pushed back parliamentary proceedings, including a vote to formally elect Japan’s next prime minister to succeed Shigeru Ishiba, who stepped down last week. The session had originally been expected to convene around October 15, but the prolonged talks have now made that timeline untenable.
Political observers say the delay underscores the fragility of the coalition that has governed Japan for decades and raises the risk of short-term legislative gridlock as the LDP under Takaichi works to re-establish stability and party unity.
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Market-implications:
- Yen could see continuing short-term volatility as political uncertainty delays government formation and policy continuity.
- Extended political limbo may delay fiscal decisions, keeping JGBs subdued in the near term.
- For equities, the delay could weigh modestly on investor sentiment, particularly in domestic sectors reliant on government spending and reform clarity.
