As Japan’s opposition circles around a unity bid, Takaichi’s route to power narrows

Under normal circumstances in Japan, the leader of the governing party would be the prime minister, particularly between election cycles.

But these are not normal times in Tokyo, with outgoing Prime Minister Shigeru Ishiba staying on in a caretaker role after resigning on Sept. 7.

Sanae Takaichi, the current president of Japan’s ruling Liberal Democratic Party and the woman poised to become the country’s first female prime minister, faces a tougher path to power after the abrupt exit of coalition partner Komeito.

Komeito’s abrupt withdrawal from the ruling coalition on Oct. 10 left the LDP with an even smaller minority in the Diet, Japan’s parliament, and opened the door for a potential opposition upset.

A vote to choose the next prime minister was initially scheduled for Wednesday, but Komeito’s pullout forced a postponement of the extraordinary session of the Diet to Oct. 21, according to local media reports.

Before the collapse of the ruling coalition last Friday, opposition unity appeared unlikely.

But over the weekend, the Japan Times reported that the main opposition Constitutional Democratic Party of Japan (CDP) planned to seek Komeito’s backing for a joint prime ministerial candidate.

Meanwhile, the Democratic Party for the People (DPP), the fourth-largest party in the Lower House, ruled out forming a new coalition with the LDP. DPP’s leader Yuichiro Tamaki reportedly said he would be willing to serve as Prime Minister if nominated by the CDP.

Other local media reports have also said Tamaki could emerge as a consensus candidate for the opposition to coalesce around.

The LDP remains the largest voting bloc in the chamber, holding 196 seats in the 465-seat Lower House.

A note from Bank of America said attention will center on the runoff round of the two-stage vote for prime minister, in which the top two finishers in the first ballot face off if no candidate wins an outright majority. If the Lower and Upper Houses choose different candidates, the Lower House’s selection takes precedence.

“Although they are struggling to unite, the three major opposition parties…together hold more seats than the LDP. We therefore need to monitor the debate on which individual parties (including Komeito) intend to support in the runoff-round vote,” the BofA note wrote.

If the CDP, DPP and Nippon Ishin unite, they will hold 210 seats, still short of the 233 needed for a majority, but surpassing the 196 held by the LDP.

However, some analysts said that the collapse of the ruling coalition could be a blessing in disguise for the LDP.

The end of the LDP-Komeito partnership might free the LDP to push long-delayed policy goals, Tomohiko Taniguchi, Special Advisor at the Fujitsu Future Studies Center, told CNBC’s “Squawk Box Asia.”

He noted that when Komeito was in the Japanese Cabinet, the LDP had to make concessions, especially when it came to social issues.

“But with the Komeito now out, the LDP under Takaichi, if she becomes Prime Minister, will be able to pursue policies the LDP has long wanted to pursue, including some of the tax breaks and changes in the tax system,” Taniguchi said.

Jesper Koll, expert director at Monex Group, said that Komeito, with its dwindling support, has “outlived its purpose” for the LDP.

“Takaichi is forcing the issue, and thereby actually laying the direction for a new LDP,” Koll said.

But other analysts were more critical of Takaichi. A November 13 note from Quantum Strategy described Takaichi’s leadership as faltering, saying she has “made a complete pigs’ breakfast of it” by losing the LDP’s coalition partner of 26 years.

Even if she secures the premiership, Quantum warned she may be a “lame duck” leader with limited ability to govern.

Barring a snap election, the next general election is not due until October 2028.