A once fringe opposition party in Japan has become the fourth largest in parliament by pushing a nationalist "Japanese First" agenda.

The loss on Sunday left the Liberal Democrats a minority party in both houses of Parliament, while two new nationalist parties surged.

Sanseito leader Sohei Kamiya's xenophobic views, antisemitic remarks and emphasis on Japan’s ethnic purity have raised alarms.

The news of Ishiba’s resignation came hours after Japan secured a trade deal with the US that cut a threatened 25-per-cent tariff to 15 per cent ahead of an August 1 deadline

TOKYO -- Japanese Prime Minister Shigeru Ishiba on Wednesday found the window rapidly closing for him to stay on as the nation's leader -- despite clinching a historic trade deal with the United States -- as his Liberal Democratic Party reels from Sunday's electoral rout in the upper house of parliament.

Having done a trade deal with US President Donald Trump, Japan's prime minister will soon announce his resignation, reports said Wednesday, after his latest election debacle left his coalition without a majority now in both houses of parliament.

The reports come after Trump announced a trade deal with Japan, and days after Ishiba’s governing coalition lost its majority in the country’s upper house.

Anti-establishment parties focused on wages, immigration and an unresponsive political elite struck a chord with working-age people in Japan.

Sanseito, a Japanese populist party that draws inspiration from Donald Trump's politics, is gaining support ahead of Sunday's upper house elections, suggesting a notable shift in the country's traditionally centrist landscape.

Its leader is a former supermarket manager who created his political party on YouTube in the depths of the coronavirus pandemic and campaigned on the Trumpian message “Japanese First.”

The fringe far-right Sanseito party emerged as one of the biggest winners in Japan's upper house election on Sunday, gaining support with warnings of a "silent invasion" of immigrants, and pledges for tax cuts and welfare spending.