Komeito's Exit Sparks Political Uncertainty in Japan

Japan's Komeito party unexpectedly decided to leave its coalition with the Liberal Democratic Party, causing uncertainty as new leader Sanae Takaichi awaits confirmation as prime minister. The separation arose from dissatisfaction with LDP's handling of a political funding scandal, forcing Takaichi to seek new alliances in parliament.

Japan's political landscape is facing turmoil as the Komeito party announced its departure from the coalition with the Liberal Democratic Party (LDP), adding a layer of uncertainty to the ascension of the new LDP leader, Sanae Takaichi, as prime minister.

Komeito leader Tetsuo Saito revealed that the 26-year coalition ended due to the LDP's unsatisfactory explanation of its political funding scandal. This move leaves Takaichi needing the backing of other parties to secure a majority in Japan's lower house of parliament.

Amidst this political upheaval, market dynamics are also affected, reversing some optimism around fiscal stimulus following Takaichi's recent appointment, as she attempts to uphold economic strategies reminiscent of 'Abenomics.'

(With inputs from agencies.)