Views have emerged that developments following the U.S. midterm elections could affect Japan's political landscape. The decline in support for the Trump administration and developments surrounding yen depreciation could spill over into the Japanese government's policy management and the nature of Japan-U.S. coordination.
Multiple polls show U.S. President Trump's approval rating falling to the mid-30% range. The background includes rising prices and the prolonged situation in the Middle East, and views that the Republican Party will lose the fall midterm elections have become predominant. It has been suggested that this could also affect the Takaichi administration's policy management, which has worked to strengthen coordination with the United States. Further yen depreciation has also been cited as a factor that could make Japan's political landscape more fluid.
Under the current scenario, which assumes a divided U.S. Congress, some believe Democrats have an advantage in the House of Representatives while Republicans have an advantage in the Senate. Coordinated intervention to address yen depreciation could continue, but if expectations for the next coordinated intervention recede, Japan may once again face a situation in which its ability to respond on its own is put to the test, according to some views.
The dollar-yen exchange rate briefly fell to the ¥155 range, and caution over additional intervention is expected to continue. If yen depreciation intensifies, dissatisfaction with rising prices through higher import costs could increase, while debate could also emerge over inconsistencies between fiscal policy and the Bank of Japan's monetary policy.
Major changes in the political situation are also expected to affect Japan's political landscape, potentially giving rise to calls for a shift in the party's policy direction. Views have emerged that yen depreciation triggered by the U.S. midterm elections could become a spark that sets Japan's political landscape in motion.