Japan in election mode - Scotiabank

Japanese economy’s favourable backdrop prompted Prime Minister Shinzo Abe to call a snap election for October 22 which are likely to remain in focus over the near term, points out Tuuli McCully, Research Analyst at Scotiabank.

Key Quotes

“The election for the House of Representatives (the lower house) was to be held by the end of 2018. Prime Minister Abe will be seeking to capitalize on stronger public support for his Liberal Democratic Party (LPD) and disarray in the opposition. Currently, the LPD and its coalition partner Komeito hold a two-thirds majority in the lower house. Renewing the solid mandate would allow the government to focus forcefully on structural reforms.” 

“The run-up to the election will likely be characterized by debates about Japan’s North Korea strategy and the revamping of the Japanese social security system against the backdrop of a rapidly aging society. In addition, Prime Minister Abe will be seeking a clear mandate to be able to move ahead with the second consumption tax rate increase in 2019. To gather support for the hike, he has signaled intentions for less fiscal consolidation, promising to direct the tax revenues to areas such as education and care services for the elderly.”