TOKYO -- Japan's upper house election race officially began on Wednesday, with Prime Minister Fumio Kishida's economic and defense policies in focus as global inflation surges and the Ukraine war casts a long shadow.

Kishida's Liberal Democratic Party leads the opposition, according to the latest polls, backed by the cabinet's relatively high approval rating of about 60%.

Yet polling also shows Japanese voters are growing frustrated with rising prices of food and energy, giving the opposition a chance to criticize the government's policies.

Voting takes place on July 10. Here are the five things to know about the election.

Why is it important?

After this one, no national elections are scheduled for the next three years. So if the LDP wins, Kishida should have plenty of time to pursue his policy goals, from ushering in a new kind of capitalism to giving Japan a counterattack capability and, possibly, amending the pacifist constitution.

These policies would have implications not only for Japan but for its Asian neighbors and the wider world.

Since he took office in October, Kishida has introduced what he calls "new capitalism ," vowing to achieve a green transformation while investing in human capital and technology. He has also pledged to increase Japan's defense budget as the geopolitical landscape changes.

"In terms of domestic politics, I think [the significance of this election] is the question of how to respond to high prices and how much support there will be for new capitalism," Harukata Takenaka, a professor at the National Graduate Institute for Policy Studies, told Nikkei Asia.

"In terms of foreign policy, Kishida has said that he will increase defense spending and consider possessing a counterattack capability, so this election will be one factor in determining how much the public will support the current ruling party in these matters."

Takenaka pointed out that the government can only do so much to control prices. As a result, he said the critical question is whether new capitalism can spur wage growth.

"Right now, nominal wages are not rising at the same pace as inflation, and the public is wondering if real income will fall. To prevent this from happening, productivity should increase, and companies should raise wages," he said. "That is what the new capitalism aims to do, but can it be done properly?"

The upper house of Japan's Diet: 125 seats are up for grabs in next month's election. (Photo by Hirofumi Yamamoto)

During a Monday debate organized by the Japan National Press Club, Kishida said the government "needs to prepare policies that will encourage wage increases [in the private sector]." An example would be offering preferential treatment for companies that pay more, through government procurement and subsidies.

Opposition leaders proposed other measures to address inflation, such as lowering the consumption tax.

What does Japan's election cycle look like, and what are the main parties?

Upper house lawmakers serve six-year terms. Elections are held every three years for half the 248 seats.

This time, a total of 125 seats are up for grabs, including one race to fill a vacancy. Seventy-five lawmakers will be elected from 45 constituencies, while the other 50 will be chosen through a proportional representation system.

The ruling coalition -- the LDP and its smaller partner Komeito -- faces a largely fragmented opposition, including the Constitutional Democratic Party of Japan (CDP), Nippon Ishin (the Japan Innovation Party) and the Japanese Communist Party.

Kishida has said that the bar for victory would be the ruling coalition controlling more than 50% of the chamber, including seats not up for reelection. That means the ruling coalition must win 56 seats on election day.

People listen to politicians campaigning in Yokohama on June 22 as races for Japan's upper house kicked off.

What do the polls say?

A Nikkei-TV Tokyo poll conducted from June 17 to 19 shows the LDP in the lead, with 43% of respondents saying they would vote for the party. In contrast, 10% said Nippon Ishin, and 8% backed the CDP.

Bringing up the rear were Komeito at 6%, the Japanese Communist Party at 3%, the Democratic Party for the People at 2%, Reiwa Shinsengumi at 2% and the Social Democratic Party and NHK Party with 1% apiece. Meanwhile, 17% of respondents said they had "not decided yet" and 6% said they "cannot say/do not know," suggesting some voters remain persuadable.

The same poll highlights voters' inflation concerns. In April, Japan's consumer price index marked its sharpest increase in seven years. Of the respondents, 64% said the current inflation rate -- pushed by soaring resource prices and a weak yen -- was "unacceptable."

The Nikkei poll shows that 44% see ensuring an economic recovery as the top priority, followed by pensions, medical and nursing care (35%), and diplomacy and security (28%).

Another poll conducted by Kyodo News on June 18 and 19 also shows that the LDP has the advantage. A leading 27% of respondents said they would pick the party when casting ballots for proportional representation seats, well ahead of Nippon Ishin's 8% and the CDP's 7%.

Since an LDP victory looks likely, what else should one watch for on election night?

One question is how much the ruling coalition can surpass Kishida's bar for victory. Winning a "surplus" would make things easier for the LDP in the next upper house election, in 2025.

"If the LDP wins as much as it can this time, Kishida will not only have a stable government for the next three years, but he will also be able to see beyond that," Takenaka said. A landslide would help Kishida stabilize his party internally as well, making it easier for the leader to push plans that would require financial resources, the professor added.

"In the next three years, the Kishida administration will have to do things that will require the people to bear the burden," he said. "In that sense, it is important to solidify the party, and to solidify the party, it is very important to win national elections."

Party leaders attend a debate ahead of the upper house election in Tokyo on June 21. (Photo by Karina Nooka)

Another critical point to consider is whether lawmakers in favor of constitutional reform end up holding a two-thirds majority, including those not up for reelection this time. To propose a constitutional change, those initiating the amendment must have two-thirds of the seats in both the upper and lower houses.

The LDP and Nippon Ishin support revising the constitution, which has been left unchanged since its enactment in 1947, two years after World War II ended. The LDP's election proposals include a move to add a clear stipulation of the existence of the Self-Defense Forces. Kishida has said this would end the debate over the SDF's constitutionality.

Will the election results affect the Bank of Japan's monetary policy?

The BOJ, led by Gov. Haruhiko Kuroda, has bucked the global trend of rate hikes by keeping its ultraloose monetary policy to support the economy. But this has resulted in the depreciation of the yen, which can benefit exporters but raises import costs and weighs on consumers.

Kuroda's term ends next April, and the upper house election could have a bearing on the choice of his successor. The governor is appointed by the cabinet, subject to the consent of the lower and upper houses.

Professor Takenaka said that the greater the margin of victory for Kishida's coalition, the more the results could affect monetary policy and the choice of the next BOJ governor.

"Kishida emphasizes the protection of the middle class and income growth. Considering inflation, if anything, he would prefer that the yen not depreciate so much," he said. "Kishida would then think that a slight rise in interest rates would not be too bad. It will be important to bring in a person capable of turning to a tighter policy as the BOJ governor."

Takenaka said some elements within the LDP would put up "fairly strong opposition" to monetary tightening. But a resounding Kishida-led victory would give the prime minister a firmer footing.

In any case, Kishida appears to be in no hurry for a BOJ shift. During the debate on Monday, he said there was no need to change the bank's policy, saying, "We should not touch it now." Some opposition leaders, including the CDP's Kenta Izumi, called for a review.

The prime minister has stressed that monetary policy should be judged "comprehensively," as it affects exchange rates and the interest rate burden on small and medium-size businesses.