Liberal Democratic Party Wins Big In Upper House Election

Japan's ruling Liberal Democratic Party (LDP) is poised to claim a single majority in Upper House election overshadowed by the assassination of former Prime Minister Shinzo Abe, preliminary results circulated by local media outlets showed.

• The LDP and its junior coalition partner Komeito are expected to win at least 76 seats, exceeding the threshold of 56 seats needed for victory by a wide margin. They are also set to increase their presence in the Upper House.
• The atmosphere in LDP headquarters was far from victorious as the party mourned its late former leader, murdered on the campaign trail just two days before voters cast their ballots.
• But political analysts have doubted that "sympathy votes" were pivotal in the LDP's strong performance. The ruling coalition held a comfortable lead in pre-election opinion polling and the result falls within Yomiuri's projection from before Abe's death.
• The result puts Prime Minister Kishida in a comfortable position to pursue his policy agenda, including the "new capitalism" plan of promoting a more equal distribution of income. The ruling coalition controls both houses of parliament and has three years until the next election.
• Kishida noted that he is considering when to reshuffle his Cabinet in the wake of the poll, which local media said might happen in September. Any changes will likely reflect power dynamics within the LDP after the removal of Abe's influence on its internal politics.
• Questions about policy continuity will be doing the rounds at the start to the week, due to Shinzo Abe's influence on the ruling party. Market participants will interrogate the extent to which Kishida can implement his flagship policy proposals.
• One thing is for sure, the clear electoral result removes political uncertainty on that front, promising markets three years of relative stability.