Japan's ruling coalition seen losing upper house majority, polls show
TOKYO : Japan's ruling coalition will likely lose its majority in the upper house election on July 20, media polls showed on Tuesday, heightening the risk of political instability at a time the country struggles to strike a trade deal with the US.
Japanese bond yields soared as investors braced for the possible loss of fiscal hawk prime minister Shigeru Ishiba, which could strain the country's already frail finances.
Ishiba's ruling Liberal Democratic Party (LDP) and its coalition partner Komeito will likely struggle to retain the 50 seats needed to defend its majority in the upper house of parliament, the Asahi newspaper said based on voter polls and nationwide reporting by its journalists.
Japan's Jiji news agency also reported on Tuesday that the ruling coalition was struggling in the election campaign and could lose its majority in the upper house.
Ishiba's administration has seen approval ratings slide as the rising cost of living, including the soaring price of Japan's staple rice, hits households.
'Ishiba's low approval ratings reflect voter dissatisfaction with the status quo,' David Boling, a director at consulting firm Eurasia Group, said in a research note, adding he sees a 60% chance of the ruling coalition losing its majority.
The political uncertainty comes at a critical time for Japan, which must clinch a trade deal with Washington by the new Aug 1 deadline to avoid being slapped with 25% tariffs.
Ishiba is arranging to meet US treasury secretary Scott Bessent on Friday during his visit to Japan to attend the US national day at the World Expo in Osaka, the Yomiuri newspaper reported.
Japan's top government spokesperson said on Tuesday that Bessent's schedule was still being arranged.
As darkening economic prospects and rising inflation hit households, Ishiba has pledged to deliver cash payouts to cushion the blow to households from rising living costs.
But Ishiba has shunned opposition calls to cut Japan's sales tax rate. An election defeat may heighten the chance of a cut, some analysts say. It would also complicate the Bank of Japan's efforts to wean the economy off a decade-long, massive stimulus.
The risk of looser fiscal policy pushed super-long Japanese government bond yields to record-high levels.
'If the ruling coalition loses a majority, markets will be on the lookout for clues on Ishiba's fate, the new government framework and its fiscal policy stance,' said Naoya Hasegawa, chief bond strategist at Okasan Securities.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Free Malaysia Today
2 hours ago
- Free Malaysia Today
Govt looks into US request to ease foreign ownership limits
Tengku Zafrul Aziz said trade officials were working to meet the new US tariff deadline of Aug 1, 'but not at the expense of agreeing to every request'. PETALING JAYA : The government is to consult industry leaders over a US request to relax the limits on foreign ownership of companies in some sectors, says investment, trade and industry minister Tengku Zafrul Aziz. Tengku Zafrul said the US had asked Malaysia to consider liberalising the foreign shareholding restrictions in force on some sectors. Many other nations have also received the same request from the US, he said. The minister said the government would need to consult industry leaders in strategic sectors to determine whether these sectors were ready for the caps on foreign equity to be lifted. 'We need to carefully study its potential impact,' he said. Tengku Zafrul pointed out that some sectors did not have such restrictions, while the manufacturing industry was 'nearly all open'. However, foreign equity limits are still being imposed on strategic sectors, he said. 'As you know, Malaysia has equity restrictions for foreign shareholders in certain sectors. There's a request for us to relook or liberalise those sectors. We need to consult those industries, on whether we are ready to relax those equity shareholding restrictions,' he said. However, not all the US requests would be accepted, he said. 'Some of the requests, we feel, may not be fair to Malaysia.' He said trade officials were working to meet US president Donald Trump's new tariff deadline of Aug 1, 'but not at the expense of agreeing to every request'. The Trump administration has said a 25% tariff would be imposed should talks on a trade deal fail. Flexibility on tariffs Tengku Zafrul said there might be room for flexibility on a sector-by-sector basis. 'There will be opportunities for us to negotiate tariffs below 10% for certain sectors. But at the same time, we cannot depend solely on this trade negotiation.' He pointed to the current status of key sectors such as semiconductors and pharmaceuticals, on which no tariffs are imposed. 'For example, pharmaceuticals are in a better position. Right now, tariffs for both the semiconductor and pharmaceutical sectors are at zero. Naturally, we want to maintain that 0% tariff, but whether we can secure it is another matter.' On the potential impact of tariff changes on the Johor-Singapore special economic zone, Tengku Zafrul said investors were holding off until there was greater clarity. 'There seems to be a wait-and-see attitude. Investors are watching how the tariff scenario plays out before recalculating their positions. That calculation can only happen once there's certainty.' Another discussion would be held this week, with talks to be accelerated until the end of the month, he said.
The Star
4 hours ago
- The Star
FBM KLCI slips to intraday low; NationGate falls on MACC raid
KUALA LUMPUR: The FBM KLCI closed at its intraday low on Tuesday, underperforming regional peers as selling pressure and cautious sentiment weighed on the local market, despite broad gains across major Asian bourses. The FBM KLCI slipped 12.11 points, or 0.8%, to close at its intraday low of 1,525.40. It had earlier touched a high of 1,538.56. Today's decline marks the index's biggest drop since it fell 0.82% on July 7. Selling pressure persisted as 601 counters fell while 412 rose, bringing market breadth to 0.14. Decliners outpaced gainers, reflecting a cautious tone in the broader market. Traded volume stood at 3.1 billion shares valued at RM2.4bil. Among the decliners, Heineken slid 40 sen to RM24.50, Malaysian Pacific Industries fell 38 sen to RM20.40, F&N declined 28 sen t RM28.70 and Hong Leong Bank gave up 26 sen to RM19.30. Gainers included Riverview, which rose 15 sen to RM3.00, Master-Pack, which added 12 sen to RM3.15, United Plantations, which gained eight sen to RM21.70, and KPS Consortium , which climbed 7.5 sen to 56.5 sen. NationGate Holdings fell 12 sen, or 7.45%, to RM1.49 with 160.51 million shares traded, making it one of the most active counters on Bursa Malaysia. In a filing with Bursa Malaysia today, Nationgate announced that the Malaysian Anti-Corruption Commission (MACC) had raided the premises of one of its subsidiaries as part of an ongoing investigation into alleged scrap metal smuggling. Earlier in the day, it was reported that the MACC had launched a major operation targeting scrap metal smuggling syndicates across five states, with the illicit activities estimated to have caused over RM950mil in lost tax revenue. NationGate Holdings fell 12 sen, or 7.45%, to RM1.49 with 160.51 million shares traded, making it one of the most active counters on Bursa Malaysia. The Malaysian Anti-Corruption Commission (MACC) has conducted a raid at the premises of a subsidiary of Nationgate as part of an ongoing investigation into allegations of scrap metal smuggling, the company announced in a stock exchange filing today. It was reported earlier today that the MACC has launched a major crackdown on scrap metal smuggling syndicates in five states. These smuggling activities were reported to have resulted in an estimated tax revenue loss of over RM950mil. Meanwhile, the ringgit strengthened 0.29% against the US dollar to 4.2410, and rose 0.3% against the Singapore dollar to 3.3108. In contrast with the local bourse, regional markets ended higher. MSCI's Asia ex-Japan stock index was higher by 1.05%. Japan's Nikkei 225 rose 0.55%, South Korea's Kospi gained 0.41%, Hong Kong's Hang Seng climbed 1.6%, China's CSI 300 edged up 0.035%, and Singapore's Straits Times Index added 0.3%.
Free Malaysia Today
5 hours ago
- Free Malaysia Today
Bursa ends at intraday low on selective heavyweight selling
KUALA LUMPUR : Bursa Malaysia ended at an intraday low today due to persistent selling in selected heavyweights, led by the financial services and construction sectors. UOB Kay Hian Wealth Advisors Sdn Bhd's head of investment research Sedek Jantan said the FTSE Bursa Malaysia KLCI's (FBM KLCI) drop today reflected a cautious undertone among investors despite an improvement in broader market sentiment. 'Investor focus remains firmly on the progress of the US-Malaysia tariff negotiations, with the Aug 1 deadline for the imposition of a 25% import duty drawing near. 'The market appears to be factoring in a drawn-out negotiation process, contributing to prevailing risk aversion,' he told Bernama. Meanwhile, he said the investment, trade and industry ministry's (Miti) announcement on trade permit for artificial intelligence (AI) chips is a welcome step towards regulatory clarity, while persistent concerns over potential US export controls on AI chip shipments to Malaysia continue to cast a shadow over sentiment, particularly within the technology and semiconductor sectors. 'Nonetheless, from a medium to longer-term perspective, we see the strengthening of governance and compliance standards as a positive structural shift that may enhance Malaysia's competitive positioning within global value chains, potentially serving as a future catalyst for investor confidence,' he added. At 5pm, the FBM KLCI fell 12.11 points or 0.79% to 1,525.40 from yesterday's close of 1,537.51. Public Bank eased eight sen to RM4.26, Maybank slid seven sen to RM9.65 and Gamuda gave up 13 sen to RM4.96. These counters dragged the composite index down by 5.42 points. The benchmark index opened 1.45 points lower at 1,536.06 and hovered between 1,525.40 and 1,538.56 throughout the session. The market breadth was negative, with 601 decliners outpacing 412 gainers and 498 counters unchanged, while 918 were untraded and eight suspended. Turnover improved to 3.07 billion shares worth RM2.36 billion, compared with 2.93 billion shares worth RM1.67 billion yesterday. Among other heavyweight counters, CIMB reduced six sen to RM6.63, Hong Leong Bank lost 26 sen to RM19.30, Tenaga Nasional decreased eight sen to RM13.90, 99 Speed Mart added three sen to RM2.30 and Sunway rose four sen to RM4.92. In active trade, Zetrix AI was 5.5 sen lower at 93 sen, NationGate shed 12 sen to RM1.49, Dagang NeXchange weakened one sen to 30.5 sen, NexG gained 0.5 sen to 47.5 sen while Tanco was flat at 90.5 sen. On the index board, the FBM Emas Index declined 82.38 points to 11,476.08, the FBMT 100 Index sank 83.43 points to 11,237.61 and the FBM Emas Shariah Index fell 77.42 points to 11,483.18. The FBM 70 Index dropped 98.80 points to 16,688.40, while the FBM ACE Index improved 16.10 points to 4,587.62. By sector, the financial services index dipped 161.22 points to 17,502.65, the industrial products and services index shaved 0.48 of-a-point to 153.39 and the plantation index eased 15.68 points to 7,418.42. The energy index inched down 8.46 points to 738.92. The Main Market volume rebounded to 1.44 billion units worth RM2.07 billion from 1.13 billion units valued at RM1.35 billion yesterday. Warrants turnover slipped to 1.28 billion units valued at RM172.45 million from 1.46 billion units worth RM208.01 million previously. The ACE Market volume increased to 347.59 million units valued at RM122.67 million versus 342.18 million units worth RM113.55 million yesterday. Consumer products and services counters accounted for 171.02 million shares traded on the Main Market; industrial products and services (350.21 million), construction (107.34 million), technology (365.39 million), SPAC (nil), financial services (54.91 million), property (134.33 million), plantation (13.85 million), REITs (28.72 million), closed-end fund (3,400), energy (69.98 million), healthcare (50.38 million), telecommunications and media (30.08 million), transportation and logistics (37.56 million), utilities (28.22 million), and business trusts (24,300).
