Komeito Withdraws from Japan's Ruling Coalition Amid Funding Disputes

End of a 26-Year Alliance

Japan's political landscape was significantly reshaped on Friday, October 10, 2025, as the Komeito party announced its withdrawal from the ruling coalition with the Liberal Democratic Party (LDP). This decision brings an end to a 26-year alliance that has been a cornerstone of Japanese governance, having been formed in 1999. Komeito leader Tetsuo Saito confirmed the split following a meeting with newly elected LDP President Sanae Takaichi, citing fundamental disagreements over political funding issues.

Disagreements Over Political Funding and Corruption

The primary catalyst for Komeito's departure was the LDP's handling of ongoing scandals related to political slush funds and its perceived lack of commitment to reform. Tetsuo Saito stated that the LDP's response to concerns about political funding was 'highly insufficient and extremely disappointing' and demonstrated a lack of 'sincerity' in addressing corruption. Komeito had proposed stricter regulations on political donations, including:

• Limiting beneficiaries of corporate donations to party headquarters and prefectural chapters.
• Banning donations to political groups headed by individual politicians.
• Capping donations to a single party at ¥20 million annually.

The LDP's failure to accept these proposals was the decisive factor in Komeito's withdrawal. The LDP has recently faced numerous scandals involving lawmakers, many linked to a faction previously led by late Prime Minister Shinzo Abe.

Implications for Japan's Political Future

The dissolution of the coalition introduces considerable political instability in Japan. The LDP had already lost its majorities in both houses of parliament prior to Komeito's exit. Komeito's withdrawal directly impacts Sanae Takaichi's bid to become Japan's next Prime Minister, as Tetsuo Saito has explicitly stated that his party will not support her in the upcoming parliamentary vote. While Takaichi may still secure the premiership due to the LDP remaining the largest party, the loss of Komeito's backing significantly undermines her legitimacy and authority. The LDP will now be compelled to seek new coalition partners, potentially from parties such as the Democratic Party for the People or Nippon Ishin no Kai, to maintain power. This political upheaval could also lead to a delay in the extraordinary Diet session, which was slated to begin on October 21.

Broader Concerns and Economic Impact

Beyond funding issues, Komeito had also expressed concerns regarding Sanae Takaichi's conservative stance on Japan's wartime history, her visits to Yasukuni Shrine, and her hardline position on foreign residents. However, Saito emphasized that the LDP's response to the slush fund scandals was the 'paramount issue'. Following the announcement, the Japanese yen briefly strengthened against the dollar, reflecting market reactions to the sudden political shift. Komeito holds 24 seats in the House of Representatives and 21 seats in the House of Councillors, making its departure a substantial blow to the LDP's parliamentary strength.