Prime Minister Sanae Takaichi’s bid to widen her majority through a snap election faces greater risk after Japan’s largest opposition party and a former ruling coalition partner agreed to form a new party.

The new partnership between the Constitutional Democratic Party of Japan and Komeito announced Thursday complicates Takaichi’s bet that she’ll be able to significantly build on her razor-thin majority in the lower house of parliament. Takaichi is expected to dissolve parliament on Jan. 23, kicking off what’s likely to be a roughly two-week campaign period with reports suggesting a national election on Feb. 8.

The leaders of the CDP, the largest opposition group, and Komeito, a smaller party that exited a long-time coalition with the ruling Liberal Democratic Party just months ago, announced their tie-up Thursday to collaborate in the expected snap election.

“We’ll establish our platform next week and base our policies on that,” CDP leader Yoshihiko Noda said at a press briefing. He added that the new party will pursue fiscal discipline.

Komeito leader Tetsuo Saito said that he and Noda will be co-leaders of the new party whose name is yet to be set.

“We have been feeling that it is necessary to urgently bring together moderate forces that we have been advancing until now,” Saito said to reporters.

The new party could prove to be a formidable opposition force against Takaichi, who is staking a greater public mandate on her own popularity by calling an early election. She’s likely wagered that her personal popularity in opinion polls will translate into electoral success, giving her greater political capital to push through her fiscal and defense policy agendas.

The united front among key opposition parties could thwart Takaichi’s ambitions. In the upcoming election, Komeito will forgo fielding candidates in single-seat districts where it used to, forcusing on winning more proportional representation votes, Saito said. That would provide support for CDP-backed candidates in single-seat districts.

With the tie-up, Komeito could provide the kind of grassroots organizational support that it used to give the LDP by mobilizing votes through its backing organization, the Buddhist group Soka Gakkai.

Local media estimates put the number of seats the LDP could have lost in the previous 2024 lower house election without Komeito’s help at anywhere between 20% and 40% of the 132 seats it ultimately won. The Nikkei newspaper estimated that the LDP would have lost about 25 seats, while broadcaster JNN said the LDP could have lost up to 32.

Japan’s lower house seats are a mix of seats won through single-seat districts and proportional representation seats allocated to parties. Saito said the new party will be formed with lower-house members first in time for the election, with upper-house lawmakers expected to join later from respective parties.

Earlier Thursday, Saito denounced Takaichi’s move to call the election, which could delay passage of the budget for the fiscal year starting in April and the implementation of fresh price relief measures.

“Politics must act swiftly,” he said. “I can’t understand why the lower house needs to be dissolved now, creating a political vacuum.”

Saito added that the yen’s weakness continues, driving up inflation, and concerns over Japan’s finances are pushing up interest rates, worsening the situation for home-buyers and smaller companies.

Those market moves have come on the back of investors so far taking bets that Takaichi will prevail. If she sees success in polls next month, her pro-stimulus policies will likely continue to ramp up public spending to goose the economy, while keeping the Bank of Japan in the slow lane on rate hikes.

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—With assistance from Akemi Terukina.

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