The roots of Japan’s economic problems go back to the late 1980s, when the nation suddenly went from challenging US economic supremacy to watching one of the world’s biggest asset bubbles burst. The Nikkei 225 index fell some 80% from a 1989 high in the ensuing prolonged period of stasis.

The ruling LDP has only been able to remain in office as a minority government as a result of the deep divisions among the opposition parties—between the far-right and the nominally liberal parties.

Japan’s right wing Sanseito party made surprise gains in Sunday’s election after running an anti-foreigner campaign

Tackling inflation was a major campaign issue in the Upper House race, with opposition parties having called for reducing or abolishing the consumption tax.

Anti-establishment parties focused on wages, immigration and an unresponsive political elite struck a chord with working-age people in Japan.

Sanseito, a Japanese populist party that draws inspiration from Donald Trump's politics, is gaining support ahead of Sunday's upper house elections, suggesting a notable shift in the country's traditionally centrist landscape.

A once fringe opposition party in Japan has become the fourth largest in parliament by pushing a nationalist "Japanese First" agenda.

The loss on Sunday left the Liberal Democrats a minority party in both houses of Parliament, while two new nationalist parties surged.