INSTANT VIEW-Investors on Japan's upper house election outcome

SINGAPORE, July 20 (Reuters) - Japan's ruling coalition possibly lost its majority in the upper house, exit polls showed after Sunday's election, potentially heralding political and market turmoil as a deadline looms on tariff negotiations with the United States.

While the ballot does not directly determine whether Prime Minister Shigeru Ishiba's shaky minority government falls, it may imply either policy paralysis or a bigger fiscal deficit depending on what the ruling party does next and how strong the opposition becomes.

QUOTES:

RONG REN GOH, PORTFOLIO MANAGER, EASTSPRING INVESTMENTS, SINGAPORE:

"The risk of coalition loss is well appreciated, and arguably priced in -- weaker yen, higher yields. We probably focus attention towards how the fiscally dovish parties do, to see whether the trade has more legs.

"Now we have got to see who won the seats from them and the two parties markets probably will be focused on are the DPP and Sanseito.

"But there are other drivers coming on the horizon for the yen, for example, the trade negotiations between the U.S. and Japan with the August deadline.

"I think the difficulty comes from the rest of the parties forming another coalition but I’m admittedly not a political expert here and I don’t know how easy it will be for the government to open the spigot. I suspect these are issues we will not have visibility on in the immediate future."