Japan: All eyes on weekend elections - Rabobank
This Sunday the 22nd, Japanese voters will elect a new lower house after premier Abe called for snap elections a month ago, points out the research team at Rabobank.
Key Quotes
“Abe himself called for the early elections, which take place one year earlier than officially required, because he wants to get the public’s support for a new set of tax and social welfare policies. But unofficial readings clearly point to other causes, for example improved approval ratings since the low July levels, a recent cabinet reshuffle, a firm stance regarding North Korea and some economic tailwind.”
“Furthermore, the opposition initially was regarded as weak and disorganized. Immediately after the elections, this expectation turned out to be more of a gamble after the Democratic Party (the largest opposition party) disbanded to merge with the Party of Hope (PoH), a new party created by Tokyo Governor Koike (note that Koike defeated Abe’s LDP party in the July Tokyo metropolitan elections). However, polls keep showing signs of weakness on the opposition side in recent weeks.”
“A poll by Asahi newspaper even indicated that Koike’s new PoH is now ranked as the third party, after the newly formed Constitutional Democratic Party. A survey conducted by Kyodo News additionally showed that Abe’s LDP and its coalition partner Komeito are even poised to retain about 310 seats — exactly two-thirds of the 465-seat chamber (and thus a super-majority) – which is of significant importance given the potential ability to change the constitution. Therefore the remaining question seems not to be if Abe will win, but by how much.”
“Abe’s victory would imply a continuation of Abenomics, implying flexible fiscal spending, structural reforms and monetary easing, although the latter is more depending on Bank of Japan’s policy changes. But picking the new BoJ governor in early 2018 might be easier when in a stable position.”