Japan’s ruling coalition suffered the widely expected loss of its majority in the July 20 election, as young voters shifted to the populist right. As a result, Shigeru Ishiba’s prime ministership now hangs in the balance.The election was for half of the 248 members of the House of Councillors, the upper house of the National Diet, Japan’s parliament. The Liberal Democratic Party (LDP) secured 39 seats, and its minor coalition partner, the Komeito Party, just eight. This left it three seats short of the 50 required to maintain its majority, as populist opposition parties made dramatic gains. The LDP is now confronted with minorities in both houses of the Diet for the first time in the party’s 70-year history. It is a huge decline from its postwar dominance of Japanese politics. In a press conference on Monday, Ishiba said he would not resign, as the LDP remained the largest party in the upper house. He also insisted he needed to stay in office to complete negotiations with the Trump administration, which had threatened to continue harsh trade tariffs after August 1. But Ishiba is facing calls from disgruntled LDP Diet members to step down. He had already led the LDP into minority government in last October’s election for the lower house of the Diet, the House of Representatives. He called the snap election in the wake of securing LDP leadership last September. Read more: Why did Japan's new leader trigger snap elections only a week after taking office? And what happens next? However, the main opposition Constitutional Democratic Party of Japan (CDP) was not responsible for this latest defeat – it managed only to retain its 22 seats. Instead, the LDP and Komeito instead lost out to the two rising populist parties: the centre-right Democratic Party for the People (DPFP), which went from four to 17 seats, and the far-right Sanseito party, which made the most dramatic gains, from one to 14 seats. Main opposition leader Yoshihiko Noda now needs to again consider whether to bring on a motion of no confidence in the Ishiba cabinet in the lower house. Last month, he backed away from doing so. Such a motion would likely succeed with the support of the other opposition parties, and immediately trigger a snap lower house election. But it would also be highly risky, as it could allow the two right-wing parties to again overshadow the main opposition.The young shift to the rightExit polls showed younger people voted in greater numbers for the two right-wing parties. Their dissatisfaction erupted against the political status quo that has long favoured older generations. Older Japanese remain the main supporters for the two major parties, as well as the smaller Komeito and the declining Japanese Communist Party. Many voters were angry about declining wages, persistent inflation, and a growing tax burden to fund the straining pension and welfare system that disproportionately benefits the elderly. The leaders of the two right-wing parties, 56-year-old Yuichiro Tamaki and 47-year-old Sohei Kamiya, more effectively used social media to exploit this electoral discontent and push their populist messages. Sanseito emerged at the start of the COVID pandemic in March 2020. It promoted anti-vaccination conspiracy theories and xenophobia through its campaign slogan of “Japanese First”. As more people have expressed frustration with Japan’s record tourist numbers, Sanseito and the smaller far-right Conservative Party of Japan sought to scapegoat the relatively small foreign resident population of waging a “silent invasion”. This includes spreading false stories about them causing local crime waves, depressing wages, hiking real estate prices, and abusing welfare. The number of foreign-born residents, mostly from other Asian countries, has steadily risen to 3.8 million to meet the demands of the shrinking labour force. However, it still only comprises about 3% of Japan’s (ageing and shrinking) population.Despite running and electing a majority of female candidates, Sanseito has also attracted criticism for wanting to end gender equality so as to raise the birth rate. It also wants to remove democratic protections from the postwar constitution and return to an imperial form of government. The success of the two right-wing parties, along with the nationalist neoliberal Japan Innovation Party, threatens to transform Japanese politics.However, it remains to be seen whether they will be able to cooperate effectively in the Diet with other parties to enact their policy agenda. This includes cutting the consumption tax rate while boosting subsidies to support families and farmers, and restricting immigration.Uncertainty reignsThe increased political uncertainty will raise concerns about Japan’s ability to continue its strategic reorientation. It has pledged to increase its defence spending to 2% of gross domestic product (GDP). It also wants to increase security cooperation with Europe, India and Australia. The LDP’s Diet members will hold a full party meeting on July 31 to assess the election. If a majority of LDP members across both houses and representatives of the party’s prefectural chapters petition for a leadership ballot, they could mount a spill against Ishiba.Ishiba now needs to continue to negotiate with opposition parties to pass legislation in both houses of the Diet. US President Donald Trump’s sudden announcement that a “massive” deal has been struck with Japan for a reciprocal tariff rate of 15% may yet give him a temporary political reprieve. But as his post-election approval rating hits a record low 23%, his ailing premiership looks even more vulnerable.Craig Mark does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.