On October 10, 2025, the ruling coalition in Japan officially announced its dissolution. The Komeito party declared the end of its 26-year cooperation with the Liberal Democratic Party (LDP), putting the newly elected LDP president, Sanae Takai, in a tough political position before officially assuming the role of prime minister.
Following the split of the coalition, although the LDP remains the largest party in both houses of parliament, it now needs to cooperate with at least two opposition parties to push through legislation. While Sanae Takai still has a good chance of becoming the prime minister, the difficulty of passing budgets and bills is expected to increase.
Komeito party leader Tetsuo Saito attributed the alliance breakdown to the inability of both sides to overcome their differences in “political donation” regulation. Saito informed party members that the cooperation came to an end because the LDP’s explanation on how to handle the “political donation scandal” was deemed “inadequate” and they were unwilling to accept reform proposals.
He stated that the Komeito party will not support Sanae Takai in the expected parliamentary vote later this month, with Komeito members instead casting their votes for Saito himself in the prime minister nomination vote.
Saito mentioned, “We are temporarily ending the alliance between the LDP and Komeito and going back to the drawing board to reconsider.”
The focus of the split between the Komeito party and the LDP lies in the regulation of corporate and group donations. According to the Japan Times, in March of this year, the Komeito party and the Constitutional Democratic Party jointly drafted a proposal advocating that corporate donations should only be allowed to be channeled to political party central offices and prefectural branches, prohibiting donations to political groups led by individual politicians (essentially donations to individual lawmakers), and setting a cap of 20 million yen per year for donations to a single party.
As the biggest recipient of corporate donations, the LDP did not clearly support imposing donation restrictions on individual lawmakers.
Saito mentioned that Sanae Takai’s response was that the LDP will “consider what to do next.” This was not sufficient to keep the two parties as partners.
However, he added that the Komeito party will not oppose all bills submitted by the LDP government, including budgets and bills that the two parties previously worked on together.
Moreover, the Komeito party expressed discontent with the appointment of Koichi Hagiuda as acting Secretary-General by Sanae Takai, as Hagiuda was also involved in a political donation scandal that has troubled the LDP for years.
However, some Japanese media outlets have pointed out that the support base of the Komeito party is the religious group Soka Gakkai. The organization has a “high degree of vigilance” towards Sanae Takai’s strong conservative tendencies, which could be one of the underlying reasons for the rupture of the alliance between the two parties.
The dissolution of the alliance directly impacts Sanae Takai’s path to becoming prime minister. Although the LDP remains the largest party in both houses, the possibility of Sanae assuming the role of prime minister still exists. However, without Komeito’s support, governing will become even more challenging.
After being elected as the LDP president last Saturday, Sanae Takai was seen as the potential first female prime minister of Japan. She is known for advocating former Prime Minister Shinzo Abe’s “Abenomics” stimulus policies, which had previously boosted the stock market and weakened the yen. However, after the Komeito party withdrew from the alliance, the so-called “Takai deal” underwent changes.
Following the news of the ruling coalition’s dissolution, the yen briefly strengthened against the dollar, reaching 152.39, before partially retracing its gains.