Japan's ruling coalition fell apart on Friday when junior partner Komeito withdrew from its long-standing alliance with the Liberal Democratic Party (LDP).

The development deals a severe blow to LDP leader Sanae Takaichi's path to the premiership.

Why has the Japanese goverment collapsed?

Takaichi, a hardline conservative, had been elected LDP chief last weekend and was due to replace outgoing Prime Minister Shigeru Ishiba later this month. Her confirmation in parliament had been considered a formality — but without Komeito's votes, her majority has evaporated.

Komeito leader Tetsuo Saito said his party could not back Takaichi because of the LDP's failure to address a political slush-fund scandal that has shaken the government for two years.

"We want the LDP–Komeito coalition to go back to the drawing board," Saito told reporters, adding that the lack of clear answers made support "utterly impossible."

Takaichi, who is hoping to become Japan's first female prime minister, called the decision "extremely regrettable" and "unilateral" but said she would continue seeking parliamentary backing. Komeito said it would still support joint budget and policy measures already in progress but not Takaichi's nomination as prime minister.

Takaichi became party leader after former Prime Minister Shigeru Ishiba announced he would step down from the top job after his ruling coalition lost majorities in both houses of parliament over the course of the year. 

What does the collapse of Japan's coalition mean?

The LDP and Komeito had formed a long-term coalition that dominated Japanese politics for the past quarter of a century.

They first shared power in 1999, forming a coalition alongside the smaller Liberal Party. When the Liberals withdrew in 2000, the LDP–Komeito partnership continued.

The collapse of the coalition comes as Japan prepares for major diplomatic meetings in Malaysia and South Korea, and a planned visit by US President Donald Trump later this month.

Markets reacted nervously, with the Nikkei stock index falling 1% as the yen briefly strengthened by 0.5% to 152.38 per dollar amid the renewed political uncertainty. The yen had fallen to an eight-month low earlier this week as investors feared that Takaichi's big spending plans would overburden the world's fourth-largest economy.

Business leaders also expressed alarm. Yoshinobu Tsutsui, head of Japan's biggest business federation Keidanren, said the breakup was "truly regrettable" at a time when "political stability is indispensable."

Who is Sanae Takaichi?

Known for her admiration of former UK Prime Minister Margaret Thatcher, Takaichi represents the conservative wing of Japan's long-dominant LDP party.

A veteran lawmaker and former internal affairs minister, she has pledged to appoint a "Nordic-level" number of women to her cabinet and to raise awareness of women's health issues.

Despite this, her record and views remain firmly traditional.

Takaichi opposes allowing married couples to keep separate surnames, supports maintaining male-only succession to Japan’s imperial throne, and is against legalizing same-sex marriage.

A heavy metal drummer when she was a student, Takaichi saw off a challenge from four other candidates who had been vying to lead the LDP.

Edited by: Saim Dušan Inayatullah