Japan is a parliamentary monarchy governed by a Prime Minister and his cabinet. The Emperor has lost most of its decisional power after WWII.
The bicameral parliament is called the Diet and is composed of the upper House of Councillors (参議院 sangi-in) and the lower House of Representatives (衆議院 shūgi-in).
The House of Representatives can be dissloved anytime by the Prime Minister (which is quite frequent), in which case by-election are called. Notwithstanding, the House of Councillors cannot be dissolved.
The lower house holds most of the decision power. The party which achieves a majority in the lower house can nominate the Prime Minister (usually the party president), which in turn will form the cabinet, generally almost exclusively out of Diet members.
Contrarily to the UK or the USA, Japanese political parties tend to change constantly, undergoing splitting of factions, renaming and regrouping, causing utter confusion for the public.
The Liberal Democratic Party (LDP or Jimintō - 自民党) is the only stable party of the last 4 decades. It has been in power from its foundation in 1958 until 2009. For 50 years, the LDP keept an undisrupted majority in parliament, although it required an alliance with the Komeitō since the economic slump of the 1990's.
The Komeitō (公明党) or "Clean Government Party" (CGP) is currently the third major party, but only account for 5 to 10% of the seats. It is the political branch of the controversial postwar Buddhist sect "Soka Gakkai" (創価学会), although it officially denied any connection due to the separation of State and religion stipulated by the constitution.
The ruling party since 2009 is the Minshūtō (民主党) or Democratic Party of Japan (DPJ), founded in 1998 by the merger of several opposition parties.
Other parties include: the Japanese Communist Party, which stay with a constant 3 to 5% of the seats at the Diet; the Japanese Socialist Party has almost completely disintegrated after internal dissensions; the Liberal Party and the Social Democratic Party.