[TOKYO] Japan’s Komeito party on Friday (Oct 10) said it would quit its coalition with the Liberal Democratic Party (LDP) throwing the LDP’s grip on power into uncertainty as new leader Sanae Takaichi awaits a parliamentary vote to confirm her as prime minister.
Komeito leader Tetsuo Saito told party members 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.
Takaichi, who the LDP picked as its new leader on Saturday, takes over a party that is 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.
The LDP also has a minority in the less powerful upper house of parliament. It has governed Japan for most of the postwar 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.
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Komeito’s departure could trigger an unwinding of the so-called “Takaichi trade,” which had been driven by investor optimism around fiscal stimulus. REUTERS
