By Takuya Nishimura, Senior Fellow, Asia Policy Point
Former editorial writer for the Hokkaido Shimbun
You can find his blog, J Update here.
March 29, 2026
A power play over Japan’s FY2026 budget bill resulted in a defeat for Prime Minister Sanae Takaichi by the opposition parties. The Liberal Democratic Party (LDP) announced on March 30 that it has given up its attempt to pass the budget bill before the end of March. The Cabinet was forced to submit to the Diet an interim budget bill to authorize spending for the beginning of FY2026. Despite this setback, Takaichi continues to be highly popular in recent polls.
Looking back at the past few months, Takaichi exercised her constitutional power and dissolved the Lower House on January 23. The House held a general election on February 8. Her decision was fundamentally surprising because the timing of the snap election put at risk passage of the annual budget bill, which must occur before the beginning of the next fiscal year on April 1. Takaichi nevertheless initiated the snap election to reinforce her political support before her approval rating fell.
The LDP’s sweeping victory in the election went beyond her expectation. Takaichi and her staff in Prime Minister’s Official Residence (Kantei) came to believe that they were invincible, able to make impossible possible. Takaichi called on the Diet to pass the budget bill before the fiscal year began. The LDP in the Lower House obliged; it passed the budget bill with only 59 hours of discussion, ignoring the established but unspoken agreement between the parties to discuss a budget bill for at least 80 hours.
This hard push by the leading party stirred anger in the opposition parties in the Upper House which still outnumber the LDP. The opposition held captive a few bills relating to the FY2026 budget. Two of them were the high school tuition bill and the free school lunch bill which were to take effect in April. These bills also needed to pass the Diet by the end of March.
The Committee on Education, Culture and Science in the Upper House was to discuss the bills. The chair of this committee is a member of the Constitutional Democratic Party of Japan (CDPJ), the biggest opposition party. The chairman delayed discussion of the bills at the request of the opposition parties who first wanted to thoroughly examine the qualifications of the Minister of Education, Yohei Matsumoto [松本 洋平], who had a history of extramarital affairs. The opposition parties threatened the LDP that they would scrap the two bills if the parties did not have enough time to discuss the budget bill in the Upper House.
The leading parties and opposition parties struck a deal in late March. The leading parties would give up on meeting the March 31 deadline for the FY2026 budget bill, allowing time in the Upper House for discussion for the bill in early April. In the meantime, there would be an interim budget bill for 11 days, by which time the Diet is expected to pass the budget. The opposition parties agreed to pass the related bills, including the high school tuition and school lunch bills by the end of March. Although media reports did not go into detail, the LDP leaders told Takaichi about the deal on March 23. But Takaishi still insisted on passage of the budget bill by the end of March.
Takaichi must have known of the LDP’s weakness in the Upper House and of the deal between the parties to pass the bills. In fact, the FY2026 budget bill includes an economic stimulus package. Any delay in the budget bill will frustrate voters who expected assistance in this time of price inflation. Takaichi and her staff mistakenly thought that the opposition parties, afraid of public annoyance, would not be so persistent in opposing the budget bill.
She and her staff miscalculated the anger of the opposition parties in the Upper House. An extraordinarily abbreviated discussion on the budget bill brought to the fore a fundamental concern about the existence of the chamber, which has been dubbed “a carbon copy of the Lower House.” Regardless of their positions as either leading or in opposition, the parties in the Upper House felt challenged about their raison d’etre.
As a matter of fact, the Upper House sometimes has played a crucial role in the history of the Japanese government. The Ryutaro Hashimoto administration fell to a minority government in the Upper House after a defeat in the 1998 election. On the advice of his mentor, former premier Noboru Takeshita, Hashimoto stepped down as prime minister even though he maintained a majority in the Lower House.
In 2007, Prime Minister Shinzo Abe believed that the LDP’s majority in the Lower House could overcome its minority position in the Upper House. The result was terrible. A cabinet reshuffling caught some ministers in scandals related to the mismanagement of political funds. When the Upper House blocked an anti-terrorism bill, Abe’s chronic disease returned, he could not attend a plenary sitting in the Diet, and he decided to resign.
Prime Minister Naoto Kan left office in 2011 because a bill to authorize government bonds to fund reconstruction after the East Japan Great Earthquake earlier that year could not pass the Upper House. He asked the LDP, which had a majority in the house, to pass the bill in return for his resignation. These episodes illustrate that the Upper House has the power to destroy an administration.
Despite her mismanagement of the budget bill, Takaichi remains highly popular in two polls. Nikkei Shimbun reported a 72 percent approval rating of Takaichi’s Cabinet. She also maintained a high rating in the Mainichi Shimbun poll with 58 percent approval. Although there is skepticism about her attitude to the Diet, a substantial share of respondents preferred her performance in her summit meeting with U.S. President Donald Trump. Her style of relying on popular opinion is still working and may continue for some time.
