This paper examines the division of Japanese conservatives into two political parties in the early post‐war period in order to understand why one party chose to enter a coalition government led by the Japanese Socialist Party in 1947 while the other refused. It argues that Japanese conservatives were divided between those who favoured heavy industry and state involvement in the solution of social and economic problems, and those who focused on the defence of the rural and traditional status quo. The war had augmented this division and moved the industrializing conservatives closer to the Socialists. This commonality of interests continued after the war and formed the political basis for an industrial–statist conservative alliance with the Socialists, which led to the formation of a centre–left coalition government in 1947.