“PUNISHING” POLITICIANS

Ishiba, 67, vowed on Monday to implement reforms to overcome “the people’s suspicion, mistrust and anger” after an LDP slush fund scandal, a major cause of its poor election results.

In the Tokyo district of Itabashi, LDP heavyweight Hakubun Shimomura won nine straight elections before being suspended over the scandal, running as an independent and losing on Sunday.

“It was kind of my way of punishing him,” local voter Yayoi Magara, 70, who used to support Shimomura but cast a blank ballot, told AFP.

Japanese companies are worried about the potential for parliamentary paralysis that would delay reforms aimed at revitalizing the world’s fourth-largest economy.

Syetarn Hansakul of the Economist Intelligence said the LDP’s poor electoral showing and “reduced political influence” could lower “investor confidence in Japan’s political and economic prospects”.

On Monday, the yen hit a three-month low, partly on fears that political uncertainty could stop or delay the Bank of Japan from raising interest rates.

“(Although) Ishiba appears to appreciate fiscal discipline, he is likely to continue to compromise and refrain from discussing additional revenue measures even if they are important in the long run,” said Shigeto Nagai of Oxford Economics.

The chairman of the Japan Business Federation on Sunday urged political parties to focus on policies to grow the economy and overcome current challenges.