Prime Minister Shigeru Ishiba has denied reports that he plans to resign following the Liberal Democratic Party's (LDP) defeat in a recent upper house election. The Yomiuri Shimbun reported on Wednesday that Ishiba would resign by the end of July, citing a report from chief trade negotiator Ryosei Akazawa. Ishiba, however, stated on Wednesday that these reports are "completely unfounded," emphasizing his commitment to implementing the recently concluded trade deal with the United States. The LDP, along with its coalition partner Komeito, lost its majority in the upper house on Sunday, adding to the political instability following a similar loss in the lower house last October.

The US-Japan trade agreement, unveiled Tuesday, lowers tariffs on Japanese auto imports. While Ishiba hailed the deal as protecting national interests, analysts like Seijiro Takeshita, dean at the University of Shizuoka’s Graduate School of Management, Informatics and Innovation, expressed reservations, urging a deeper assessment beyond the numbers. The election saw gains for conservative and right-wing populist parties, fueled by voter frustration with economic issues and a feeling of being ignored by the government.

Ishiba's potential resignation less than a year into his term would trigger a leadership battle within the LDP as it grapples with declining support and new challenges from emerging political parties. Public sentiment is mixed, with some expressing disappointment in the trade deal's terms while others find the reduced tariffs a positive outcome. Opposition parties have indicated openness to policy cooperation but have not expressed interest in forming a coalition.

Impact Statement: The LDP's loss of its upper house majority exacerbates Japan's political instability and could lead to significant changes in leadership and policy direction.