Japanese Prime Minister Shigeru Ishiba is facing growing pressure from within the ruling Liberal Democratic Party (LDP) following its defeat in the parliamentary upper house election on July 20. The loss resulted in the LDP and its coalition partner Komeito losing a majority in the body. Ishiba has declared he will remain in office and has so far refused to step down.

An inner-party conflict has emerged in the LDP. Already a minority government in parliament’s lower house since the general election last October, significant sections of the LDP are openly turning against Ishiba. No government has lost its majorities in both houses of parliament, known as the National Diet, and remained in power since the LDP’s founding in 1955.

The moves against Ishiba go beyond a simple electoral loss. Party confidence in Ishiba is rapidly declining as the government confronts Trump’s tariffs and economic demands on Japan amid the US-led drive to war against China, an economic slowdown and growing discontent among workers and youth over declining living conditions.

These issues however are finding no expression in the public discussion over Ishiba’s future. The focus instead is on demanding the prime minister “take responsibility” for the LDP’s electoral losses.

On Monday, the LDP held an informal gathering of party executives and its members in both houses of parliament. According to upper house member Yohei Wakabayashi, approximately 80 percent of those who spoke during the meeting called on Ishiba to resign. He told reporters afterwards, “Party executives bear the responsibility of failing to improve the party’s standing.”

Ishiba rejected these demands, saying, “I want to fulfill my responsibility and not create a political vacuum for the state and people.” He referenced a tariff deal with Washington made just days after the election, adding, “We must make every effort to ensure that it is implemented.”

The prime minister’s repeated refusal to resign contradicts rumors swirling around him. Major newspapers including the Yomiuri Shimbun and Mainichi Shimbun last week reported that Ishiba planned to resign by the end of August. Ishiba, however, stated on July 23 that there was “absolutely no truth” to these reports.

The prime minister may not have much say in the matter. His opponents in the LDP have called a plenary session of the party in the coming week with the purpose of moving up the party’s leadership election, which is currently two years away. If Ishiba is removed as party president, he would also be removed as prime minister.

At least two of the most right-wing factions within the LDP have pushed for the plenary session, including that around former prime minister Shinzo Abe, who led Tokyo’s remilitarization while in power from 2012 to 2020. After leaving office, Abe served as a more openly anti-China attack dog until his assassination in July 2022.

Another faction associated with Sanae Takaichi, who narrowly lost the party leadership election to Ishiba last year, has also pushed for the plenary meeting. She is another anti-China hawk who was close to Abe and ran for the 2021 party leadership position with his backing. Takaichi is a potential candidate to replace Ishiba.

A third faction associated with former LDP secretary-general and Ishiba rival Toshimitsu Motegi has also backed the meeting. While the LDP claims that factions have been abolished following a fundraising scandal that erupted in November 2023, these party big-wigs and their networks retain significance influence.

The maneuvering against Ishiba is also being characterized as a movement of mid-level and junior LDP Diet members, in what is likely an effort to appeal to younger and urban voters. The head of the LDP’s Youth Division, Yasutaka Nakasone, has taken part in this drive. Nakasone is the grandson of former prime minister Yasuhiro Nakasone, who promoted Japan’s remilitarization in the 1980s.

However, it is not a given that an LDP candidate would replace Ishiba as prime minister if he is removed. Though there is little possibility at this time of the opposition uniting behind a single candidate, a new prime minister would have to be approved by the Diet’s lower house.

A split in the LDP is not out of the question. On July 23, Ishiba held a unusual meeting with former prime ministers Fumio Kishida, Yoshihide Suga, and Taro Aso. According to Ishiba, the four did not discuss his future as prime minister, but instead, “We shared a strong sense of crisis. There were various discussions, including that party division must never occur.”

Major splits in the LDP have occurred in the past. During the 1990s, the LDP plunged into crisis amid the economic stagnation that followed the collapse of the share market and property bubbles. Several factions broke from the LDP. Some, together with breakaways from opposition parties, went on to form the Democratic Party of Japan, the forerunner of today’s main opposition, the Constitutional Democratic Party of Japan.

Ishiba’s removal would resolve none of the issues facing the government. Washington is demanding that Tokyo raise military spending to five percent of GDP more than doubling the current increase from one to two percent that is already underway. Washington has also demanded that Tokyo make explicit that Japan would join a war against China over Taiwan.

On July 22, Trump announced that he had reached a trade deal with Tokyo, under which the so-called “reciprocal” and sectorial auto tariffs would each be reduced from 25 percent to 15 percent. Tokyo also apparently pledged to invest some $US550 billion in the US with Trump claiming that US companies would reap 90 percent of the profits. Tokyo has disputed this, saying profit would be distributed “based on the degree of contribution and risk taken by each party.”

The deal also reportedly includes a pledge to purchase more US rice without raising Japan’s import quota which is designed to protect Japanese famers who make up a significant portion of the LDP’s base. The 50 percent tariff on steel and aluminum were not part of the deal, according to Japan’s lead negotiator Ryosei Akazawa.

Details of the agreement have not been fully worked out. “There is nothing inspiring about the deal,” said Mireya Solís, a senior fellow at the Brookings Institution, to the Financial Times. “Both sides made promises that we can’t be sure will be kept… there are no guarantees on what the actual level of investments from Japan will be.”

The tariffs and the demands for even further militarization mean that the squeeze will be put on workers even as they deal with the soaring cost-of-living costs, including rice prices that have doubled since last year.

None of the establishment parties in Tokyo has any progressive solutions to the crisis that is gripping the Japanese ruling class. Whatever Ishiba’s particular fate, the result is likely to be a further drive to the right.