Recent polling results indicate a significant decline in the approval rating of Japan's Cabinet, marking the lowest level since it took office last year. Data from multiple media outlets consistently point to this trend. A mainstream survey shows support has fallen from nearly 70% in June to around 50%, while another joint survey recorded a drop of approximately ten percentage points. Additional data suggests approval has dipped below 54%. Public dissatisfaction with the government's measures to alleviate inflationary pressure is spreading, while a series of controversial bills pushed by the administration have exacerbated the loss of support.

The rising cost of living has become a key factor undermining the political support base. Surveys show that the proportion of citizens dissatisfied with the government's measures to address rising living costs has surged, with over 70% of respondents expressing negative views. This pressure has left the government hesitant on whether to cut the consumption tax on food, a measure originally promised to mitigate the cost-of-living impact that has yet to be implemented. Meanwhile, tendencies toward expansionary fiscal and monetary policies have led to a surge in Japanese government bond yields, while the yen exchange rate has fallen to levels not seen in approximately 40 years. Market pressure is intertwined with opposition voices within the ruling party.

Amid the declining approval ratings, outside observers are closely watching to see if the Cabinet will undergo a reshuffle soon. Market analysts note that while current support levels remain high compared to some past administrations and the political foundation has not been completely shaken, the political capital gained from election victories is gradually being consumed. Market focus centers on the signals that a Cabinet reshuffle might release and the direction of future reflation policies. The Bank of Japan previously raised interest rates to their highest level in 31 years; however, with inflation rates hovering near the target for consecutive years, real borrowing costs remain negative. While government fuel subsidies helped keep the core consumer inflation rate below the central bank's target for several consecutive months, core inflation is expected to rise above the target later this year as producer price increases gradually transmit through the economy.