The result over the weekend is a major blow for prime minister Ishiba as he now will come under heavy scrutiny and pressure to remain in office. The ruling LDP-Komeito coalition only managed to secure 47 seats, just short of the 50 seats required for a majority. That sees them lose their stranglehold on the upper house of parliament for the first time since 1955.The Japanese yen surged initially but gave back a chunk of those gains, with some mixed flows amid concerns that the political risks might deepen. And the latest developments also won't help with sentiment in the bond market, with 30-year JGB yields continuing to keep above 3% amid fiscal concerns and now the political gridlock.After having already lost control of the lower house in October, this now significantly weakens Ishiba and the incumbent government's control over any policy in Tokyo. Given the run up in yields since April, one can argue that much of this is already factored into the equation.However, the mere reality of it is still something that hits hard especially since we don't normally associate Japan to political instability. It is only ever since Covid and Abe's death that brought about a major change in landscape to the political scene in Tokyo.So, how does all this impact Ishiba and Japan's negotiations with the US on tariffs?Given the tight timing, I reckon nobody would want to push to oust Ishiba before trade talks meet the 1 August deadline. That will keep Ishiba in the hot seat at least for the time being.However, lawmakers can and might use this against him. Given the government's now weakened position, Ishiba could face struggles in trying to convince lawmakers to back any agreement that he brings home from Washington. That especially if he makes concessions at the last minute, after having talked up a tough game in the last few months.That suggests an increasing likelihood that Japan will be facing up against 25% tariffs come what may on 1 August. That as Ishiba's position is now compromised and any meaningful engagements with the US during this period will be undermined by the potential for a snap leadership vote. This article was written by Justin Low at investinglive.com.