The Era of Multi-Party Politics in Japan and Policy Direction Towards Japan

Changsoo Jin

jincs@sejong.org

Principal Research Fellow​

Sejong Institute​

1. Changes in Japanese Politics: The Era of Multi-Party Politics

For the first time in Japanese constitutional history, Takaichi Sanae, President of the Liberal Democratic Party (LDP), was elected as a female Prime Minister. Although the Takaichi administration was formed as a coalition between the LDP and Nippon Ishin no Kai (the Japan Innovation Party), the dissolution of the LDP-Komeito coalition government brought to a close the era in which the LDP had monopolized power over the long term. This followed the Komeito's announcement on October 10th that it was withdrawing from the coalition government with the LDP. The stable LDP-led administration known as the "1999 System" (referring to the LDP-Komeito coalition arrangement) has now reached its historical end. Just as the confrontation between the LDP, founded in 1955, and the Japan Socialist Party gave rise to what is known as the "1955 System," the "1999 System" refers to the coalition framework that the LDP and Komeito had maintained over the past 26 years. The foundation sustaining the LDP-Komeito coalition throughout that period was electoral cooperation, whereby LDP and Komeito candidates mutually supported one another through a system of cross-endorsement, enabling the LDP-led government to maintain stability. Going forward, however, the loss of Komeito's organizational vote — estimated at around 10,000 votes per single-member district — is likely to result in a further reduction of LDP seats. Moreover, because the coalition between the LDP and Nippon Ishin no Kai is not an electoral coalition, the extent to which it will benefit the LDP in elections remains uncertain.

The collapse of the LDP-Komeito coalition has ushered Japan into an era of multi-party politics in which no single party is capable of governing alone. The Takaichi administration commenced as a minority government, having formed a coalition with Nippon Ishin no Kai but falling short of a majority. At the time of its inauguration, the ruling coalition held 230 seats in the House of Representatives, three short of the 233 seats required for a majority out of 465 total seats. In the House of Councillors as well, the administration operates as a minority government, falling six seats short of a majority. As is the case in multi-party states in Europe, Japan has now entered a situation in which a minority ruling party governs while the composition of the government remains fluid depending on interparty coalition dynamics. As a result, it has become difficult to pass desired legislation in both chambers, and the stability of the administration can no longer be guaranteed. Should the opposition parties unite, a change of government could occur.

2. Will the Takaichi Government Become a Stable Government?

Prime Minister Takaichi’s approval rating is very high—around 70%. This reflects both the novelty of Japan’s first female prime minister and public expectations for her pursuit of a “strong economy.” However, the LDP’s approval rating remains around 30%, not recovering to its previous 40%+ levels. A November Nikkei survey showed 36% support for the LDP. By comparison, in January 2013 during Abe’s second administration, cabinet approval was 50% while LDP support stood at 44%. Party support has yet to fully recover.

Against this backdrop, the timing of the election will determine the fate of the administration. Within the Liberal Democratic Party, there are two contrasting positions regarding when the election should be held. First, there is the cautious camp. They argue that support for the party has not even reached the 33 percent level recorded in October 2024, immediately prior to the lower house election in which the party suffered a major defeat, making an election difficult under current conditions, see Table 6. Moreover, they contend that losing Komeito’s organizational votes, estimated at around 10,000 ballots per single member district, would further reduce the LDP’s seat count. By contrast, proponents of an early election are also significant in number. They point to signs that support among younger voters is recovering and that conservative voters who place their hopes in Prime Minister Takaichi are returning to the LDP. From this perspective, some observers speculate that January next year could be the decisive moment for Takaichi. If an election is not held in January, it may be postponed until April or later. However, beyond that point, if the prime minister fails to deliver tangible achievements, approval ratings are likely to decline. Ultimately, if holding an election becomes difficult in 2026, Prime Minister Takaichi’s ability to command the political landscape will inevitably weaken. The timing of the election could therefore determine her political fate.

Although Prime Minister Takaichi’s support base includes a substantial number of hardline conservatives, her election strategy is likely to center on how effectively she can mobilize these voters through her economic policies addressing rising prices and her right leaning policy agenda. Seemingly mindful of former Prime Minister Shinzo Abe, Takaichi has advanced economic measures and foreign and security policies through a “Kantei led” approach. Presenting herself as Abe’s political successor, she has advocated proactive fiscal policy and signaled her intention to carry forward Abe’s signature economic program, Abenomics. However, there are important differences from the Abe administration.

First, inflation. Under the second Abe administration, average annual price increases remained below 1 percent. At present, Japan’s consumer price index has recorded year on year increases of 2.0 percent or more for three and a half consecutive years through October 2025. Second, exchange rates and inflationary conditions. During the second Abe administration, the exchange rate remained below 100 yen to the dollar. Recently, however, the yen has depreciated significantly. Concerned about inflationary pressures, the Bank of Japan ended its zero interest rate policy in March 2024. Third, parliamentary status. Unlike the Abe era, when the ruling party secured a single party majority in the House of Representatives, Prime Minister Takaichi now leads a minority ruling party in both the House of Representatives and the House of Councillors. The Japan Innovation Party, which forms part of the governing arrangement, provides support in the form of “cooperation outside the cabinet,” without taking ministerial posts.

Can Takaichi’s “responsible proactive fiscal policy” deliver tangible results? From the outset of her tenure, Prime Minister Takaichi has pursued an expansionary fiscal agenda branded as “Sanaenomics.” As a result, she formulated an economic stimulus package exceeding 20 trillion yen, the largest since the COVID 19 crisis. However, proactive fiscal measures and monetary easing have faced a critical juncture from the very beginning of the administration. Price control measures, combined with the weaker yen and rising import costs, have instead contributed to accelerating inflation. The opposition, meanwhile, has remained anchored in a deflation era mindset, arguing that price measures are insufficient and calling for tax cuts and expanded cash transfers. If political actors respond by further increasing fiscal spending, the risk of a vicious cycle cannot be ruled out. Moreover, addressing structural challenges in public finance and social security will require cooperation with the opposition, making fiscal expansion an increasingly likely trajectory.

Prime Minister Takaichi has shown a clear tendency to advance conservative policies in order to reclaim support from conservative voters who have shifted to Sanseito and the Democratic Party for the People. Moreover, with the coalition partner changing to the Japan Innovation Party, the Takaichi administration no longer faces the restraining influence previously exercised by Komeito. As a result, it has become easier for her to project a distinct policy stance, particularly on security issues.

First, as Prime Minister Takaichi had pledged, the LDP began discussions on October 20 to revise the three key security related documents. Second, security issues that had long been considered politically sensitive have resurfaced. These include reconsideration of the Three Non Nuclear Principles and accelerating the achievement of defense spending at 2 percent of GDP. Third, the LDP and the Japan Innovation Party have set a goal of expanding exports of domestically produced defense equipment. They have pledged to abolish the “five categories” export framework, a key condition governing defense exports, during the 2026 ordinary Diet session. Under the Kishida Fumio administration, similar discussions were abandoned after opposition from Komeito. Fourth, stricter standards are being applied to foreign resident policy. Fifth, the administration opposes the introduction of a system allowing married couples to retain separate surnames. Sixth, it is actively pursuing the enactment of an anti espionage law.

Takaichi’s right leaning policy agenda forms part of her electoral strategy. It is being used to consolidate a broader conservative support base. On security issues, the administration seeks to mobilize conservative voters by heightening a sense of crisis. Domestically, policies on foreign residents, the anti espionage law, and tensions in Japan China relations serve as defensive mechanisms aimed at preventing conservative support from shifting to Sanseito or the Democratic Party for the People.

However, the Takaichi administration has entered a more unstable phase as the Japan Innovation Party continues to adhere to a framework of “cooperation outside the cabinet.” This arrangement creates an environment in which the Japan Innovation Party can readily withdraw from the coalition at any time. “Cooperation outside the cabinet” refers to a structure in which the party does not send ministers to the government and therefore does not bear formal political responsibility, yet cooperates in key parliamentary matters such as the prime ministerial nomination vote and responses to no confidence motions against the cabinet. The Japan Innovation Party’s decision not to accept Prime Minister Takaichi’s request for “cooperation within the cabinet” reflects a calculated effort to maintain a certain distance from the LDP, thereby preserving room to exit the coalition should internal discord within the administration intensify.

For the LDP to maintain a stable relationship with the Japan Innovation Party, it must give due consideration to issues the latter prioritizes, including the reduction of the number of Diet members. Although the LDP has expressed agreement with a proposal to reduce the number of seats in the Diet, it remains uncertain whether the relevant legislation will pass the Diet. In that case, the course of action the Japan Innovation Party may choose remains unclear. The party has expressed a sense of urgency, arguing that “unless the number of Diet seats is reduced first, reforms such as social security restructuring or the development of a secondary capital cannot be realized.”

In addition, prolonged confrontation in Japan–China relations could become a diplomatic burden over the longer term. In the short term, tensions with China tend to boost Prime Minister Takaichi’s approval ratings. However, depending on how the situation evolves, they could ultimately pose risks to her administration. In particular, China has not limited its response to calls for the withdrawal of Takaichi’s remarks, but has gone further by raising fundamental questions regarding the San Francisco Peace Treaty itself. As Japan’s political landscape trends more conservative, it has become increasingly difficult for Tokyo to pursue compromise. China, for its part, has intensified its offensive through a strategy aimed at polarizing Japanese domestic opinion while simultaneously increasing pressure within the international community. If Japan–China tensions become protracted, debates over the prime minister’s responsibility are likely to intensify, and criticism from the opposition could grow stronger.

Although Prime Minister Takaichi has recently exercised restraint in her public remarks, she continues to assert that the United States and Japan share responsibility within the international community and that Japan cannot yield to what she characterizes as China’s improper posture. In this regard, she has sought to explain to the United States that China’s claim, directed at Global South countries, that Japan is attempting to alter the status quo is unfounded. She has also argued that if Japan were to retreat on this issue, it could ultimately affect U.S. policy as well.

There are two reasons why Prime Minister Takaichi cannot withdraw her earlier remarks. First, there are concerns that doing so would narrow the interpretation of a “situation threatening Japan’s survival,” the legal condition for exercising the right of collective self defense. A retraction could be perceived as signaling that a Taiwan contingency does not constitute such a situation. If so, it could make Japan’s involvement in a Taiwan emergency more difficult in practice. Second, there is the political burden. Withdrawing her remarks could invite criticism that she is adopting a “conciliatory posture toward China,” which in turn carries the risk of declining approval ratings and instability in the political foundation of her administration.

3. The Impact of Changes in the Japanese Political Landscape on Korea-Japan Relations

Because the Takaichi administration governs as a minority ruling bloc, the degree of political uncertainty has increased relative to previous LDP administrations. Prime Minister Takaichi must secure a stable governing arrangement through compromise with the Japan Innovation Party, while simultaneously maintaining the possibility of policy coordination with opposition parties. Should political instability persist in Japan, structural constraints will limit the government’s capacity to proactively advance the development of Japan–South Korea relations.

Prime Minister Takaichi’s hardline conservative orientation may also constitute a potential source of friction. It is difficult to expect that she will adopt the forward looking stance on historical issues sought by South Korea. Takaichi has garnered support from conservative constituencies through her positions on constitutional revision, visits to Yasukuni Shrine, and a revisionist interpretation of history. In the event of an unanticipated development, statements reflecting her long held convictions could exacerbate emotional tensions between Japan and South Korea.

At the same time, it is unlikely that she would deliberately steer bilateral relations toward confrontation through actions such as visiting Yasukuni Shrine or advancing historical narratives that would provoke South Korean public opinion. Several factors underpin this assessment. First, visits to Yasukuni Shrine face strong opposition from the United States as well as from domestic opposition parties, making such actions difficult in the near term. Second, given her active engagement with security related priorities emphasized by her conservative support base, Takaichi is likely to prioritize political stability. Third, amid Japan’s ongoing tensions with China, it is evident that Tokyo will seek to avoid unnecessary friction with Seoul. Nevertheless, as Japan’s political landscape trends more conservative, dissatisfaction toward Japan among segments of South Korean civil society persists, leaving latent sources of tension in place.

Prime Minister Takaichi’s external policy orientation may function as a double edged sword for Japan–South Korea relations. A central issue in the revision of the three security documents concerns how to respond to what is characterized as “new forms of warfare.” The strengthening of counterstrike capabilities, including the capacity to strike enemy bases, is also likely to become a key agenda item. The introduction of offensive weapons will inevitably raise questions regarding the permissible limits of Japan’s exclusively defense oriented policy under its Constitution. This, in turn, creates the need to reassess the scope of Japan–South Korea security cooperation in light of evolving interpretations of constitutional constraints.

In addition, defense spending is projected to increase to nearly 20 percent of the national budget. Given that both Japan and South Korea face U.S. demands for higher defense expenditures, how each country responds constitutes a significant policy challenge. An increase in Japan’s defense budget driven primarily by domestically framed threat perceptions will have implications for South Korea as well. In this regard, bilateral discussions concerning the role of U.S. forces and the sharing of defense costs will become increasingly important.

Moreover, a deepening of Japan–China tensions may also affect South Korea. In such a scenario, China could adopt a dual track strategy toward Seoul, seeking to draw South Korea closer through engagement while simultaneously intensifying diplomatic and economic pressure. Consequently, South Korea will face the “task of managing its strategic position amid intensifying China–Japan competition.” It must also carefully consider the extent to which it is prepared to expand security cooperation with Japan under conditions of sustained Chinese pressure.

Japan–South Korea relations are not defined solely by negative dynamics. Within Japan’s political establishment, there is broad consensus that bilateral cooperation remains important during the Trump period. The fact that President Lee Jae Myung has pursued a pragmatic diplomatic approach toward Japan and has managed the relationship in a stable manner has also had a positive effect. Accordingly, it is evident that Prime Minister Takaichi, unlike in earlier periods, will seek to minimize friction and adopt a strategic posture aimed at expanding areas of mutual understanding and converging interests. This orientation was reflected at the October 30 Japan–South Korea summit, where she expressed her “hope for broad based cooperation across security, economic, and social domains” and called for “the development of a future oriented bilateral relationship.”

4. Policy Direction Toward Japan

Since the conclusion of the 1965 Treaty on Basic Relations between Japan and the Republic of Korea, bilateral relations have evolved through three broad phases: the Cold War period, the democratization period, and the post democratization period. First, during the Cold War, trilateral security cooperation among South Korea, the United States, and Japan was prioritized, while historical issues were largely relegated to the periphery. Second, with democratization in South Korea, Seoul pressed more forcefully for the resolution of historical issues, and Japan responded with a reluctant posture. Nevertheless, during this period the two countries expanded points of contact not only in relation to historical matters but also across economic, cultural, and security domains, and bilateral exchanges broadened in multiple sectors. Third, in the post democratization period, growing uncertainty in international politics has reinforced the need for strategic cooperation between South Korea and Japan. Managing adverse factors while expanding strategic collaboration has become essential. Both countries must exercise prudence and strategic judgment in order to generate mutually beneficial outcomes.

Japan–South Korea relations should now be approached as a horizontal and equal partnership. In the context of changing bilateral dynamics, it is necessary to move beyond a vertically framed, demand centered mindset toward Japan that reflects earlier asymmetries. In economic and cultural exchanges, the two countries increasingly find themselves in situations of mutual need. In some areas, South Korea may even need to provide support to Japan’s startup ecosystem and IT sector. Recognizing these shifts, Seoul should formulate a more reciprocal and bidirectional policy toward Japan.

Moreover, in the Trump era, South Korea and Japan face structurally similar positions within the international system. Coordinated responses to unilateral demands from the United States or China are likely to be more effective than unilateral action by either country. Conversely, if bilateral relations deteriorate into conflict and confrontation, both countries risk being leveraged by major powers. For the peace and prosperity of East Asia, the potential gains from Japan–South Korea cooperation are substantial. The two governments should therefore institutionalize cooperation in future strategic sectors such as energy policy and artificial intelligence. Advances in cutting edge technologies and energy transition face inherent limitations if pursued independently; synergy can be maximized only when the two countries combine their respective technological capabilities and resources in a complementary manner. Japan–South Korea cooperation should serve as a foundation for jointly managing uncertainty generated by U.S.–China rivalry and for enhancing national interests. Moving beyond a conflict prone and competitive bilateral framework, the relationship should evolve toward a complementary partnership oriented toward regional public goods.

The direction of South Korea’s policy toward Japan should rest on three pillars. First, it should restore trust on the basis of a horizontal and equal relationship. Second, it should strengthen the role of the two countries as strategic partners within the international system. Third, it should develop into substantive cooperation that generates mutually beneficial outcomes. These objectives require sustained efforts by both governments.

To advance bilateral relations, cooperation should begin with areas where implementation is feasible. One proposal is the introduction of a Japan–South Korea version of the Schengen system. This could include, first, measures to facilitate freer movement and exchange, such as the issuance of bilateral entry licenses and the establishment of dedicated immigration channels for South Korean and Japanese nationals. Second, the liberalization of employment opportunities in each other’s countries could be pursued. Third, the two governments could work toward mutual recognition of driver’s licenses and the interoperability of transportation cards.

Second, strategic communication must be diversified. In this regard, it is important to rebuild parliamentary diplomacy channels. With generational turnover in both countries’ political establishments and changing political environments, the number of Japan friendly and Korea friendly legislators has declined, making the reconstruction of parliamentary level engagement increasingly significant. In addition, 1.5 track strategic dialogue should be revitalized to provide a platform in which both countries can jointly explore emerging policy agendas. Expanding discussions on issues such as energy security, demographic challenges including low birth rates and population aging, and artificial intelligence would create opportunities for mutually beneficial cooperation. By institutionalizing dialogue across a broader range of sectors, the two governments can foster conditions conducive to sustainable and reciprocal collaboration.

Third, future oriented investment policies should be revitalized. Bilateral statistics indicate that exchanges at the local government level have stagnated. Both countries are currently confronting shared structural challenges, including population decline in regional areas and industrial contraction. When intergovernmental tensions intensify, subnational exchanges tend to be suspended and are often difficult to restore. Given that the Ishiba administration, and subsequently the Takaichi administration, have demonstrated interest in regional revitalization, efforts should be made to enable local governments to build the infrastructure of Japan–South Korea relations beyond fluctuations at the central government level. Expanding school excursions and homestay programs should also be considered.

Fourth, cooperation should be strengthened from the perspective of economic security. Facilitating the smooth exchange of information, which forms the foundation of economic security, is an urgent priority. In areas that link national security and the economy, including supply chain resilience, cybersecurity, and the protection of advanced technologies, the two countries should expand trust based cooperation through systematic information sharing. To reinforce the framework for collaboration, institutional barriers should be lowered and a shared vision for future industries should be developed. In the process of addressing common challenges, a de facto Japan–South Korea economic community could gradually take shape.

Fifth, avenues for addressing historical issues should be explored through engagement with Japanese civil society. Resolution of historical disputes should not be equated with historical amnesia, but rather pursued in accordance with universal global values and norms. Despite operating in difficult circumstances, Japanese civic organizations have raised these issues for decades and have contributed to efforts toward their resolution. The South Korean government should show sustained interest in enabling such activities within Japan to continue and expand.

Sixth, the two countries should promote joint Mega Projects. Cooperation on shared challenges, including regional depopulation, artificial intelligence, population aging, and youth population decline, can generate mutually beneficial outcomes. Establishing a Japan–South Korea cooperation fund with participation from private capital in both countries, and utilizing a future partnership fund to support joint initiatives addressing common challenges, would provide institutional foundations for long term collaboration.