Japan, Ishiba
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Japan's election outcome may put the central bank in a double bind as prospects of big spending could keep inflation elevated while potentially prolonged political paralysis and a global trade war provide compelling reasons to go slow on rate hikes.
Japanese Prime Minister Shigeru Ishiba’s ruling coalition has lost its majority in the upper house of parliament.
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Its leader is a former supermarket manager who created his political party on YouTube in the depths of the coronavirus pandemic and campaigned on the Trumpian message “Japanese First.”
The loss on Sunday left the Liberal Democrats a minority party in both houses of Parliament, while two new nationalist parties surged.
Japanese markets were closed for a holiday, but the rise in the yen and Nikkei futures showed investors had already priced in the election outcome.
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Japan’s shaky ruling coalition is likely to lose its majority in the upper house, exit polls showed after Sunday’s election, potentially heralding political turmoil as a tariff deadline with the United States looms.
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World markets are mixed after U.S. stock indexes hit new records. Oil prices fell and U.S. futures were little changed.