Japan: Focus on elections - BBH

Japan goes to the polls on October 22 and the main question now is whether the LDP and its Komeito Party ally will retain their super-majority, according to analysts at BBH.  

Key Quotes

“The Party of Hope is not running enough candidates to win a majority of the seat.  Polls suggest it has lost some momentum.  There appears to be some infighting, according to reports.  There will be 465 seats in the next Diet.  The governing coalition needs to win 307 seats to retain its 2/3 majority.”  

“Under what conditions could Abe feel compelled to step down?  We suspect that nothing shy of not being able to marshal a majority coalition would push Abe out of office.  It is possible that a defeat in which the LDP itself fails to win an outright majority may spur a leadership challenge this time next year, Abe would likely to retain office.”  

“The two big policy issues that the Party of Hope has staked out is the phasing out of nuclear power entirely and abolishing the retail sales tax hike planned for 2019.  It is not clear, at this juncture, that Abe can co-opt either issue.  A cabinet reshuffle after the election seems only natural.  Here there may be an opportunity to steal some thunder of the Party of Hope and further expand on Abe's third arrow through the power of appointment to the cabinet.”