Japan’s Liberal Democratic Party reclaimed power in a landslide victory three years after surrendering half a century of control.
Shinzo Abe’s LDP yesterday captured 294 seats in the 480- member lower house of parliament, while Prime Minister Yoshihiko Noda’s Democratic Party of Japan lost three-fourths of its lawmakers, according to public broadcaster NHK’s vote count. Abe, 58, is set to replace Noda, returning to the office he left five years ago for health reasons.
The yen fell to a 20-month low against the dollar and stocks rose to an eight-month high on expectations Abe will expand monetary and fiscal stimulus in a bid to defeat deflation. Japan’s seventh leader in six years, he inherits a country in recession, still reeling from the 2011 earthquake and nuclear crisis, and embroiled in a diplomatic dispute with China, with an upper house election only seven months away.
“Abe’s popularity will disappear very quickly if he does something wishy-washy or overreacts and leads Japan into a real crisis with China,” said Aiji Tanaka, a political science professor at Waseda University in Tokyo. “If he is calm and handles the situation well, he can keep up the momentum until July. The DPJ is now a medium-sized party. They performed very badly and disappointed almost everyone in Japan.”
Abe told NHK a special parliamentary session to vote him into office may be held Dec. 25 or 26. He may name former Prime Minister Taro Aso as finance minister when he picks his Cabinet as early as Dec. 26, Kyodo News reported, without saying where it got the information.
[h=2]‘Looking Carefully’[/h]“Voters will be looking carefully at the LDP to see if we fulfill their expectations,” Abe said last night on NHK.
The DPJ, which had 230 lower house lawmakers before the election, won 57 seats. Noda, 55, said he will step down as party leader to take responsibility for the loss. Eight Cabinet ministers lost their seats, including Finance Minister Koriki Jojima and Chief Cabinet Secretary Osamu Fujimura.
“It is unfortunate that we’ve lost many colleagues who worked so hard with us in the government,” Noda said. “It grieves me deeply.”
LDP partner New Komeito won 31 seats, giving the coalition a two-thirds majority that would enable it to override most decisions by the upper house, where the DPJ is the largest party. The Japan Restoration Party of ex-Tokyo Governor Shintaro Ishihara and Osaka Mayor Toru Hashimoto won 54 seats.
[h=2]Voter Turnout[/h]A dozen parties campaigned for the lower house, which is made up of 300 single-member constituencies and 180 proportionally apportioned seats. Turnout was 59.3 percent, the worst for a lower house election since World War Two, NHK said.
The DPJ, undermined by internal squabbling, retreated from pledges to shrink the bureaucracy and boost child welfare. Support for Noda, the party’s third premier in as many years, fell as he passed a bill doubling the sales tax and restarted atomic power plants after the Fukushima nuclear crisis.
The LDP victory marks a personal comeback for Abe, who quit as premier in 2007 after a year in office, citing a stomach ailment. He advocates “unlimited easing” by the Bank of Japan (8301) to cope with more than a decade of deflation, and increased public works spending.
Abe yesterday said he would decide on the timing of the increase in the 5 percent sales tax after looking at next year’s second-quarter data. The tax is set to go to 8 percent in April 2014 and 10 percent in October 2015.
[h=2]Market Reaction[/h]The yen fell to as low as 84.48 per dollar, the weakest since April 2011, while the Nikkei 225 Stock Average was up 1.6 percent. The 10-year government-debt yield rose 1 basis point to 0.735 percent, after hitting a nine-year low of 0.695 percent on Nov. 30.
A central bank report last week illustrated the challenges Abe will face, with confidence among large Japanese manufacturers sliding to the lowest level in almost three years. The Bank of Japan’s quarterly Tankan index fell to minus 12 in December, the fifth straight release in which pessimists outnumbered optimists.
The world’s third-largest economy contracted in the second and third quarters, meeting the technical definition of a recession.
The LDP leader has also called for strengthening control over the islands known as Senkaku in Japan and Diaoyu in China, and has pledged to boost defense spending. Japan’s purchase of the island chain in September sparked violent demonstrations in China and damaged the $340 billion trade relationship between the world’s second-and third-largest economies.
“In all likelihood, the bloom will be off the rose by next summer’s upper house election,” said Gregory Noble, a professor of politics at the University of Tokyo. “The underlying fact is that the economy is terrible and is not likely to get better soon, and as a result voters are unhappy.”
To contact the reporters on this story: Isabel Reynolds in Tokyo at [email protected]; Takashi Hirokawa in Tokyo at [email protected]
To contact the editor responsible for this story: Peter Hirschberg at [email protected]
Shinzo Abe’s LDP yesterday captured 294 seats in the 480- member lower house of parliament, while Prime Minister Yoshihiko Noda’s Democratic Party of Japan lost three-fourths of its lawmakers, according to public broadcaster NHK’s vote count. Abe, 58, is set to replace Noda, returning to the office he left five years ago for health reasons.
The yen fell to a 20-month low against the dollar and stocks rose to an eight-month high on expectations Abe will expand monetary and fiscal stimulus in a bid to defeat deflation. Japan’s seventh leader in six years, he inherits a country in recession, still reeling from the 2011 earthquake and nuclear crisis, and embroiled in a diplomatic dispute with China, with an upper house election only seven months away.
“Abe’s popularity will disappear very quickly if he does something wishy-washy or overreacts and leads Japan into a real crisis with China,” said Aiji Tanaka, a political science professor at Waseda University in Tokyo. “If he is calm and handles the situation well, he can keep up the momentum until July. The DPJ is now a medium-sized party. They performed very badly and disappointed almost everyone in Japan.”
Abe told NHK a special parliamentary session to vote him into office may be held Dec. 25 or 26. He may name former Prime Minister Taro Aso as finance minister when he picks his Cabinet as early as Dec. 26, Kyodo News reported, without saying where it got the information.
[h=2]‘Looking Carefully’[/h]“Voters will be looking carefully at the LDP to see if we fulfill their expectations,” Abe said last night on NHK.
The DPJ, which had 230 lower house lawmakers before the election, won 57 seats. Noda, 55, said he will step down as party leader to take responsibility for the loss. Eight Cabinet ministers lost their seats, including Finance Minister Koriki Jojima and Chief Cabinet Secretary Osamu Fujimura.
“It is unfortunate that we’ve lost many colleagues who worked so hard with us in the government,” Noda said. “It grieves me deeply.”
LDP partner New Komeito won 31 seats, giving the coalition a two-thirds majority that would enable it to override most decisions by the upper house, where the DPJ is the largest party. The Japan Restoration Party of ex-Tokyo Governor Shintaro Ishihara and Osaka Mayor Toru Hashimoto won 54 seats.
[h=2]Voter Turnout[/h]A dozen parties campaigned for the lower house, which is made up of 300 single-member constituencies and 180 proportionally apportioned seats. Turnout was 59.3 percent, the worst for a lower house election since World War Two, NHK said.
The DPJ, undermined by internal squabbling, retreated from pledges to shrink the bureaucracy and boost child welfare. Support for Noda, the party’s third premier in as many years, fell as he passed a bill doubling the sales tax and restarted atomic power plants after the Fukushima nuclear crisis.
The LDP victory marks a personal comeback for Abe, who quit as premier in 2007 after a year in office, citing a stomach ailment. He advocates “unlimited easing” by the Bank of Japan (8301) to cope with more than a decade of deflation, and increased public works spending.
Abe yesterday said he would decide on the timing of the increase in the 5 percent sales tax after looking at next year’s second-quarter data. The tax is set to go to 8 percent in April 2014 and 10 percent in October 2015.
[h=2]Market Reaction[/h]The yen fell to as low as 84.48 per dollar, the weakest since April 2011, while the Nikkei 225 Stock Average was up 1.6 percent. The 10-year government-debt yield rose 1 basis point to 0.735 percent, after hitting a nine-year low of 0.695 percent on Nov. 30.
A central bank report last week illustrated the challenges Abe will face, with confidence among large Japanese manufacturers sliding to the lowest level in almost three years. The Bank of Japan’s quarterly Tankan index fell to minus 12 in December, the fifth straight release in which pessimists outnumbered optimists.
The world’s third-largest economy contracted in the second and third quarters, meeting the technical definition of a recession.
The LDP leader has also called for strengthening control over the islands known as Senkaku in Japan and Diaoyu in China, and has pledged to boost defense spending. Japan’s purchase of the island chain in September sparked violent demonstrations in China and damaged the $340 billion trade relationship between the world’s second-and third-largest economies.
“In all likelihood, the bloom will be off the rose by next summer’s upper house election,” said Gregory Noble, a professor of politics at the University of Tokyo. “The underlying fact is that the economy is terrible and is not likely to get better soon, and as a result voters are unhappy.”
To contact the reporters on this story: Isabel Reynolds in Tokyo at [email protected]; Takashi Hirokawa in Tokyo at [email protected]
To contact the editor responsible for this story: Peter Hirschberg at [email protected]