Nikkei soars as Abe returned in landslide victory

Nikkei soars as Abe returned in landslide victory

23/10/17

Luke Foddy, Communications Manager

Prime Minister Shinzo Abe performed better than expected in Japan’s snap general election, keeping his two-thirds ‘supermajority’ by securing more than 310 of the house’s 465 seats.

The landslide victory will strengthen the Prime Minister’s hand in seeking the constitutional and economic reforms that he campaigned on, including a major financial stimulus package aimed at boosting productivity.

Leading economist Hajime Takata, from the Mizuho Research Institute, last month briefed Asia House members on Abenomics, offering a positive outlook for Japan’s economy. The election result has been well received by the markets, with the Nikkei 225 index initially rising to its highest level since 1996 following Mr Abe’s victory, which will give him more time to see his policies through.

Mr Abe’s win could see progress on the Japan-South Korea-China trade agreement, some commentators say. According to the national Asahi Shimbun (Morning Sun) newspaper, ‘moves toward improving the relationship with China are also being mulled. Abe wants to realise his ambition to visit China in 2018, and for Chinese President Xi Jinping to visit Japan.

‘Key priorities regarding China are whether to proceed with Foreign Minister Taro Kono’s planned visit to the nation, and to host a summit meeting with China and South Korea in Tokyo in December,’ the paper reports.

Mr Abe has also been at the centre of the long-negotiated EU-Japan FTA, so his re-election may enable recent momentum to continue.

Geopolitically, Mr Abe will now be able to push for constitutional reform – including a historic shift in Japan’s defence policy – and a tougher line on North Korea, which proved popular among voters.