Recent poll shows risk of ruling coalition losing majority
New coalition could include party favouring easy policy
Messy election outcome could hurt Ishiba39;s hawkish streak
Political disorder risks causing delay in BOJ rate hikes

TOKYO, Oct 22 Reuters The risk of Japan ending up with a minority coalition government after the upcoming general election is raising concerns that the central bank could face complications in its quest to gradually wean the nation off decades of monetary stimulus.

Several recent polls have shown the possibility of the ruling coalition losing its majority in parliament, which could cost premier Shigeru Ishiba his job or force his Liberal Democratic Party LDP to look for an additional coalition partner to stay in power.

Such a prospect could deprive the BOJ of the political stability needed to steer a smooth liftoff from nearzero interest rates, some analysts say.

It will also cause uncertainty in markets as attention is drawn to the policy stance of opposition parties that could become a potential coalition partner, many of which favour maintaining low interest rates.

Many opposition and ruling parties are calling for steps to boost wages, which could make it hard for the BOJ to hike rates until there is more clarity on next year39;s wage developments, said Naoya Hasegawa, chief bond strategist at Okasan Securities.

If the ruling coalition loses, markets will start to price in the chance of aggressive fiscal spending and a delay in…