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Japan’s ruling party is in crisis as voters swing to right-wing rivals. Can a new leader save it?

The Liberal Democratic Party faces internal divisions and must tackle inflation and demographic decline while competing with rising right-wing parties, amid calls to regain public trust.

  • On Saturday the Liberal Democratic Party will choose a new leader to replace the previous leader, whose resignation last month triggered the leadership race.
  • A funding scandal involving undocumented political funds and election setbacks in the past year weakened the coalition amid Japan's demographic crisis and ageing population.
  • Sanae Takaichi leads opinion polls as a fiscal expansionist promoting tax cuts and stimulus, while Shinjiro Koizumi offers moderate cost relief and Yoshimasa Hayashi opposes large stimulus.
  • Markets are on edge as Japanese markets pull back from record highs and long-term bond yields react, while the new party leader faces rising prices, coalition challenges, and a possible summit with U.S. President Donald Trump.
  • The rise of parties like Sanseito has complicated coalition-building, as nationalist leader Sohei Kamiya gains support and Japan's foreign labour force topped more than 3.7 million last year.
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Japan’s ruling party is in crisis as dissatisfied voters swing to right-wing rivals

Japan’s ruling party is in trouble, and it knows it.

·Atlanta, United States
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The Washington Post broke the news in on Thursday, October 2, 2025.
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