Japanese voters handed a landslide victory to the governing Liberal Democratic Party in parliamentary elections on Sunday, opening the possibility of dramatic changes in the long-paralyzed country, even as it returned Japan to effective one-party rule that seemed to thwart recent hopes for a more competitive democracy.
By securing control of both houses of Parliament for up to three years, the win offers Prime Minister Shinzo Abe, an outspoken nationalist who promises to revitalize Japan’s stagnant economy and strengthen its military, the chance to be the most transformative leader in a decade. It also offered an opportunity to end the nation’s series of short-lived and ineffective prime ministers.
In less than two weeks the Bank of Japan will consider extending its easy monetary policy for the second meeting in a row—something it hasn’t done since 2003.
Under pressure from Japan’s newly elected Prime Minister Shinzo Abe, the BOJ is expected to expand its purchases of government bonds and double its inflation target to 2%. This move is expected to devalue the yen in an effort to boost exports and the broader Japanese economy.
Japan’s monetary policies will hurt Japan’s economy and the U.S. economy, says Peter Schiff, CEO of Euro Pacific Precious Metals.
“Japan doesn’t need more inflation,” he says. “They actually need a stronger yen, higher interest rates. They need to allow their economy to restructure…to shrink government. Instead they’re simply going to do more of what’s been failing for the past two decades.”
He tells The Daily Ticker that if inflation rises in Japan, Japanese citizens will likely unload low-yielding Japanese bonds in favor of higher yielding precious metals and other assets. That could force the BOJ to buy more Japanese government debt instead of U.S. government debt, says Schiff.
President Barack Obama applauded former Japanese prime minister Shinzo Abe on his conservative opposition’s electoral win Sunday, saying he looked forward to working with the next government.
Voters dumped Prime Minister Yoshihiko Noda three years after his Democratic Party of Japan (DPJ) promised a change from more than half a century of almost unbroken rule by Abe’s Liberal Democratic Party (LDP).
“I congratulate Liberal Democratic Party President Shinzo Abe on his party’s success in the elections in Japan today,” Obama said in a statement.
“The US-Japan Alliance serves as the cornerstone of peace and prosperity in the Asia-Pacific and I look forward to working closely with the next government and the people of Japan on a range of important bilateral, regional and global issues.”
The Liberal Democratic Party will return to control the government it has ruled over for almost six decades after being out of power for three years and three months with a landslide win in the Lower House election on Dec. 16.
Shinzo Abe, who became LDP president in September, will be named the next prime minister in a special Diet session that is expected to be convened in the week beginning Dec. 24. He will return to a post he abruptly resigned in September 2007.
The ruling Democratic Party of Japan suffered a devastating defeat, and Prime Minister Yoshihiko Noda announced his resignation as party head late on Dec. 16 to take responsibility for the drubbing suffered by his party.
The newly formed Japan Restoration Party, headed by former Tokyo Governor Shintaro Ishihara and Osaka Mayor Toru Hashimoto, became the third largest party in the Lower House, but another new party, the anti-nuclear Tomorrow Party of Japan, led by Shiga Governor Yukiko Kada, suffered a major setback.
The turnout according to figures compiled by The Asahi Shimbun was about 59 percent, which would be about 10 percentage points below the turnout for the landmark 2009 Lower House election, which ushered the DPJ into power.
The LDP victory was equivalent to the sweeping victory in the 2005 Lower House election when postal privatization was the major issue.
The LDP’s ruling coalition with New Komeito has secured a total of more than 320 seats, or two-thirds of the seats in the Lower House, which would allow the coalition to pass legislation on a second vote in that chamber and override the Upper House, even if it defeats the bill.
Voters were expected to return Japan’s conservative Liberal Democratic Party (LDP) to power in an election on Sunday after a three year hiatus, giving ex-Prime Minister Shinzo Abe a chance to push his hawkish security agenda and radical economic recipe.
An LDP win would usher in a government committed to a tough stance in a territorial row with China, a pro-nuclear power energy policy despite last year’s Fukushima disaster and a potentially risky prescription for hyper-easy monetary policy and big fiscal spending to beat deflation and tame a strong yen.
Media surveys have forecast the LDP will win a big majority in parliament’s powerful 480-seat lower house, just three years after a devastating defeat that ended more than 50 years of almost non-stop rule by the business-friendly party. However, many voters remained undecided just days before the vote, the polls showed.
With just days to go before Japan’s lower house election determines the next government, local media polls showed Tuesday that the main opposition Liberal Democratic Party was on its way to a sweeping victory that could hand it and its smaller ally a two-thirds majority, allowing it to enact badly needed legislation that has been roadblocked for years.
Should the LDP and its ally, New Komeito, secure 320 or more lower-house seats, they could override any upper house veto, overcoming the gridlock of a “divided” parliament. Earlier this year, the passage of budget-related legislation was delayed by combined resistance by the opposition parties in the upper house.
The results of a survey by the Mainichi daily newspaper showed that the LDP appeared set to single-handedly win nearly 300 of 480 lower-house seats. Combined with those of New Komeito, the total could surpass 320.
The nationwide poll was conducted by telephone Saturday through Monday. The Mainichi said its projections were based on a survey of around 77,000 voters and additional reporting from its bureaus nationwide.
Polls released last week also projected a solid LDP majority. But the Mainichi survey is the first indicating that the former ruling combination of the LDP and New Komeito could secure a two-thirds majority.
The survey also projected Prime Minister Yoshihiko Noda’s ruling Democratic Party of Japan is in for a crushing defeat, securing less than a third of its current 230 seats. That is a more dismal scenario than in earlier surveys projecting the DPJ losing over half its seats.
Japanese politics are shifting to the right, and the impact on regional security could be crucial.
Former Prime Minister Shinzo Abe’s surprise victory to head Japan’s Liberal Democratic Party (LDP) last week represents a second chance to lead the conservative party and, by early next year, very possibly all of Japan. His first stint as prime minister ended in 2007 with a whimper after just a year. A second go as Japan’s leader is apt to be accompanied by noisier ambitions.
Before one assumes this has something to do with major reforms within the LDP or Abe’s charisma (many Japanese are impressed by neither), Japan’s political currents are primarily driven by disappointment in the ruling Democratic Party of Japan (DPJ). Although Prime Minister Yoshihiko Noda may be the best of three successive DPJ leaders since taking control of the country in 2009, he could feel the full brunt of electoral frustration at the next election, as early as November but no later than next summer.