Japan's Ruling Coalition Faces Uncertain Future in Parliamentary Elections

Japan's ruling Liberal Democratic Party, along with its coalition partner, may not secure a parliamentary majority, exit polls suggest, creating uncertainty in the government. The main opposition is also falling short, possibly leading to new power-sharing agreements amid economic challenges and political scandals.

Exit polls from Japan's general election indicate that the ruling coalition, led by the Liberal Democratic Party (LDP), may not achieve a parliamentary majority, raising questions about the government formation in the world's fourth-largest economy.

NHK's poll shows the LDP and its junior coalition partner might claim 174 to 254 of the 465 lower house seats, while the main opposition party is expected to win between 128 and 191 seats. These results could potentially force the LDP or opposition party into coalition talks.

Market instability is anticipated due to potential political changes, especially as Japan deals with inflation and shaky relations with China. If Prime Minister Ishiba opts for a coalition partner favoring near-zero interest rates, it may conflict with the Bank of Japan's interest in lifting rates gradually.

(With inputs from agencies.)