Japan was plunged into political chaos on October 10, 2025, as its long-standing ruling coalition collapsed, casting doubt over Sanae Takaichi’s historic bid to become the nation’s first female prime minister. The abrupt withdrawal of the Komeito party from its 26-year partnership with the Liberal Democratic Party (LDP) has not only left Takaichi’s parliamentary majority in tatters but also sent shockwaves through financial markets and the broader political landscape.
The split was announced by Komeito leader Tetsuo Saito after talks with the new LDP chief, Sanae Takaichi, broke down over the LDP’s handling of a political slush fund scandal that has dogged the government for two years. According to Reuters, Saito told party members, “We want the LDP–Komeito coalition to go back to the drawing board,” adding that the lack of clear answers made support for Takaichi “utterly impossible.” He further explained, “Given that we have not received clear and concrete cooperation from the LDP regarding our demands, and if these reforms prove impossible to achieve, I said (in the meeting) that it would be utterly impossible for us to write Sanae Takaichi’s name in the nomination.”
The consequences were immediate. Without Komeito’s votes, Takaichi—elected LDP leader just days before—found herself 37 seats short of a majority in the lower house. The LDP also holds a minority in the less powerful upper house, compounding the crisis. According to The Japan Times, opposition parties now have a real opportunity to put forward their own candidates when parliament convenes for the prime ministerial vote later this month. If no candidate wins a simple majority in the first round, a runoff between the top two will determine the outcome.
Takaichi responded to the coalition’s collapse by calling it “extremely regrettable” and “unilateral.” She told reporters, “We have cooperated over the last 26 years, including when we were out of power. That this relationship is coming to such a conclusion is extremely regrettable.” Still, she vowed to continue seeking parliamentary backing, though her path to the premiership is now fraught with uncertainty.
The LDP-Komeito alliance, formed in 1999, has been the bedrock of Japanese politics for a quarter of a century. The coalition weathered numerous storms, including periods out of power, but was ultimately undone by the LDP’s failure to adequately address the slush fund allegations. Komeito’s decision was not entirely unexpected; as reported by Nikkei Asia, the party had grown increasingly frustrated with the LDP’s lack of transparency and concrete reform.
Though Komeito will not back Takaichi’s nomination as prime minister, Saito stated the party would still support joint budget and policy measures already in progress. This partial cooperation may help prevent immediate legislative paralysis, but the government’s ability to pass new laws or implement major reforms is now in doubt.
The timing of the crisis could hardly be worse. Japan is on the cusp of major diplomatic engagements, including high-level meetings in Malaysia and South Korea, and a planned visit by US President Donald Trump later in October. The political uncertainty has rattled business leaders and investors alike. The Nikkei stock index fell by 1% on the day of the announcement, while the yen briefly strengthened by 0.5% to 152.38 per dollar, according to Bloomberg. The so-called “Takaichi trade,” which had lifted stocks on hopes of renewed fiscal stimulus, now appears to be unwinding amid doubts about the new government’s stability.
Yoshinobu Tsutsui, head of Japan’s influential business federation Keidanren, expressed alarm at the breakup, telling reporters it was “truly regrettable” at a time when “political stability is indispensable.” Market watchers noted that the yen had recently hit an eight-month low on concerns that Takaichi’s spending plans could further strain the world’s fourth-largest economy.
Sanae Takaichi, 64, is no stranger to controversy or the spotlight. A former internal affairs minister and a veteran lawmaker, she is known for her admiration of former UK Prime Minister Margaret Thatcher and her staunch support of the late Shinzo Abe’s “Abenomics” stimulus policies. Takaichi has pledged to appoint a “Nordic-level” number of women to her cabinet and raise awareness of women’s health issues, moves that have been praised by some as progressive steps in a traditionally male-dominated political culture.
Yet, her record remains firmly conservative. Takaichi opposes allowing married couples to keep separate surnames, supports maintaining male-only succession to Japan’s imperial throne, and is against legalizing same-sex marriage. As The Guardian reports, Komeito was reportedly also uneasy about her regular visits to the Yasukuni shrine, which honors Japan’s war dead—including convicted war criminals. Such visits have historically provoked diplomatic tensions with China and South Korea, as well as disquiet in Washington. Media reports suggest Takaichi may skip attending the shrine’s autumn festival, scheduled for October 17 to 19, in a bid to avoid further controversy.
Takaichi’s ascent to the LDP leadership marked a “new era,” as she put it, after winning a runoff against the more socially progressive Shinjiro Koizumi. Koizumi, 44, would have been Japan’s youngest prime minister in the modern era and represented a generational shift for the LDP. The party, however, has been hemorrhaging support, with voters increasingly turning to smaller parties such as the anti-immigration Sanseito. The coalition’s collapse is likely to accelerate this trend, further fragmenting Japan’s political landscape.
If Takaichi manages to secure the premiership, she will inherit a daunting array of challenges: an aging population, persistent economic stagnation, geopolitical turbulence in East Asia, and growing unease about immigration. Her first major diplomatic test will come almost immediately, with US President Trump’s visit to Japan scheduled for late October. Whether she can command enough support in parliament to even reach that point, however, remains an open question.
For now, Japan finds itself in uncharted waters. The collapse of a coalition that has dominated politics for a generation has exposed deep rifts within the ruling establishment and shaken public confidence in the country’s leadership. As the dust settles, all eyes will be on the upcoming parliamentary vote and the political maneuvering that is sure to follow. The stakes could hardly be higher—not just for Sanae Takaichi, but for Japan’s future direction at home and abroad.
The coming weeks will test the resilience of Japan’s political institutions and the ability of its leaders to forge new alliances in the face of adversity. For now, the only certainty is uncertainty itself.