Suddenly Japanese politics has a new star: the voter. After decades of more or less complacently returning the long-dominant Liberal Democratic Party to power, Japan's electorate is now showing its willingness to punish politicians swiftly and surely for policy missteps. Sunday's Upper House election was the third poll in a row upending the balance of power in the national Diet. Politicians--and parties--are on notice that their shelf life may be severely limited.

Everyone knew that the unnecessarily ham-fisted performance of former premier Yukio Hatoyama would damage his Democratic Party of Japan in the first elections since it took power last September. Still, most observers figured that by dumping both Mr. Hatoyama and scandal-plagued party Secretary-General Ichiro Ozawa just weeks before the polling, the party would avoid massive losses. But that was before new Prime Minister Naoto Kan abruptly raised the specter of doubling the consumption tax, to 10%, in the final days of the campaign. According to most polls, Mr. Kan's popularity--along with that of the party--dropped sharply after those comments. Mr. Kan then tried to backpedal in the final hours, making himself appear like a Hatoyama-lite--yet another flip-flopper.

The result was a wipe-out for the DPJ, at least as far as Upper House elections go. The DPJ's 2007 takeover of the Upper House in a coalition put the Liberal Democratic Party on the final path to losing power. Now the LDP has stormed back, capturing 51 of the 121 seats up for grabs, while the ruling DPJ won a mere 44, a loss of 10 seats. All the opposition parties combined won a resounding 77 seats, giving them a total of 132, to the DPJ's 110 seats. A mere two years after winning a majority, the DPJ has lost it.

A major political problem was that the necessity of forming a coalition with small parties including the People's New Party caused the DPJ to make unpalatable policy compromises on issues like postal reform (which the PNP vigorously opposes) that harmed its image with voters. This left it in the unenviable position of appearing as a roadblock to reform. At one level, this election was a referendum on the DPJ's inability to make the transition from campaigning to governing.

More broadly, this was about the realignment in Japanese politics that has been ongoing since 1993 and has seen the emergence and disappearance of dozens of small parties. Some of those small parties, like the PNP, caused problems for the DPJ. Others, such as the economic-liberalization-minded Your Party, gained public support after breaking off from the LDP, and may well be just as crucial to the DPJ's future if it can help the DPJ push through any reforms. This election suggests that political equilibrium in Japan is not on the horizon, especially when the ruling party underperforms as much as the DPJ has.

The DPJ remains in solid control of the powerful Lower House, yet it does not have a two-thirds majority, which would allow it to override any Upper House vetoes. Mr. Kan will have to figure out a way to cobble together a majority coalition. He needs 11 seats to do so, but the parties with that number, including the new Your Party, have declared their opposition to forming a coalition at least for now.

The LDP is feeling flush with victory and its president has rejected out of hand any talk of a "grand coalition" with the group that ended its half-century reign. Such positions are less principled than calculating, however, and it is well to remember the LDP's acquiescence in a 1994 coalition with the former Socialist Party that helped bring it back into power after the only other time it lost control of the Lower House.

Until Mr. Kan and the DPJ figure out their coalition strategy, Japan is back to the "twisted Diet" of 2007-09 that halted any type of legislative progress. At a time of slumping economic growth and numerous external security challenges, the inability to pass crucial legislation is a disaster waiting to happen. Meanwhile the DPJ will be struggling against its own lack of coherent policy plans. Mr. Kan was right to point out the necessity of tackling Japan's massive public debt, but he will have to come up with specific pro-growth policies. If the DPJ goes through a second year without any tangible progress, voters may well sour completely on the party, leading to even more political instability in coming elections.

Complicating matter, dynamics within the DPJ are certain to get worse. Given the shock of Mr. Hatoyama's resignation, the last thing the party wants is to lose another premier. However, the knives already are out as party members cast about for an explanation for their defeat. One school lays blame at Mr. Kan's feet, citing his hasty consumption-tax pledge. Another faults party founder Mr. Ozawa for pushing an election strategy that fielded multiple DPJ candidates in the same district, thereby splitting the DPJ vote.

Speculation will now turn to the upcoming September elections for party president. Mr. Kan, a self-stylized activist and reformer from his earliest days in office is by all accounts opposed to Mr. Ozawa, who continues to wield enormous power inside the party. Due to his political fund-raising scandals, it is unlikely that Mr. Ozawa will run for president himself, though it would not be impossible. Mr. Ozawa is more likely to field his own candidate to run against Mr. Kan. Moreover, waiting in the wings are younger DPJ politicians who for the most part have been relegated to the wings while Messrs. Ozawa, Kan and Hatoyama battled among themselves.

Japan's citizens will be watching this process closely. They delivered a resounding vote for change last August, and not having received it, delivered another resounding vote on Sunday. What's clear is that, after nearly 20 years of economic stagnation and nearly the same span undergoing political realignment, Japanese voters are demanding that their representatives live up to their promises and change things for the better. Despite Japan's hapless politicians, that's the most positive trend in the country today.

Michael Auslin is a resident scholar at AEI.

Photo Credit: iStockphoto/uschools