Osaka voters rejected a referendum on Sunday that would have dramatically reorganized the Osaka city government into a large metropolitan entity, like Tokyo.
The defeat was a stunning rejection of a pet reform project of Osaka Mayor Toru Hashimoto, an effort he started in 2010.
At a news conference in Osaka after the referendum went down to defeat, Hashimoto said he would keep his promise to retire from politics if it failed and will step down when his term as mayor ends in December.
The result means not only that the Osaka city government will remain unchanged, but that political dynamics at the national level will also move in a different direction.
If Hashimoto leaves the political stage in December, the Osaka Restoration Party, regional party of the Japan Innovation Party, that he established in 2010 with former right wing Tokyo Governor Shintaro Ishihara, would have less impact on its national counterpart, the Japan Innovation Party.
The Japan Innovation Party would likely strengthen its stance as an opposition party in the Diet, and the Abe administration may have to revise its strategy for revising the Constitution without the Japan Innovation Party as an ally.
With an Upper House election scheduled for the summer of 2016, some Japan Innovation Party lawmakers, especially those without a base in Osaka, could bolt the party and join forces with the opposition Democratic Party of Japan.