TOKYO, July 11—The expected Liberal Democratic Party landslide giving the ruling party supermajority with sympathy votes for Shinzo Abe’a assassination should pressure prime minister Fumio Kishida, dubbed as Doing-Nothing PM, to take visible actions on wide fronts, notably for bolstering the weak yen to stem import inflation, securing stable energy imports, Constitution amendments and closely-linked calls to double defense spending.
All of the tasks that await the DNPM when he forms a new cabinet later this month require Herculean might as his party lawmakers and the public, emboldened by the fresh realization that ‘Japan must be strong,’ are expecting him to morph into a PM of action, e.g., going beyond Abe’s ‘Abenomics’ to bolster the Japanese economy, now near the bottom of the OECD rung in income.
Among those key tasks and numerous others, the easiest one that would yield short-term results is to appoint the successor to Haruhiko Kuroda, the Bank of Japan governor that Abe appointed in 2013 for the Abenomics to keep Japan’s interest rates at zero indefinitely.
Kuroda deployed what he called the ‘bazooka’ monetary policy pumping trillions of yen into the banking system and other policy tools to keep rates zero, at some point, to negative levels, while Abe instructed the Ministry of Finance to issue government debts sky-high.
Abenomics, however, failed to buoy Japan out of the downfall that began after the bursting of the bubble economy in 1991, and on the contrary, sent government debts nearly out of control.
Kuroda’s term is July 8, 2023.
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Insight Into the Future