TOKYO (Reuters) – Japanese Prime Minister Fumio Kishida’s Liberal Democratic Party (LDP) was set to increase its majority in the upper house with its junior coalition partner in Sunday’s election, public broadcaster NHK’s exit polls showed.
The widely expected outcome comes two days after the fatal shooting of prominent LDP member and power broker, former premier Shinzo Abe.
The LDP and the Komeito party were likely to win between 69 to 83 seats out of the 125 contested in Sunday’s vote, according to exit polls.
YOICHIRO SATO, INTERNATIONAL RELATIONS PROFESSOR, RITSUMEIKAN ASIA PACIFIC UNIVERSITY
“To some degree, there might have been sympathy votes in relation to the Abe murder, but not the biggest factor in the election. Kishida’s approval ratings have remained solid, and another COVID wave hasn’t hit yet. And the international security situation is favourable for the LDP for strong defence.
“So the next upcoming issue will be the defence budget, as Kishida already promised to Biden to increase that.”
HARUYA SAKAMOTO, PROFESSOR, KANSAI UNIVERSITY
“Barring a snap election (for the lower house), there won’t be a national election for three years. I believe Prime Minister Kishida has gained a basis on which he can run a government stably, and he will find himself in a situation where he can tackle a revision to the constitution.
“The LDP’s Abe faction has been working well with Kishida. Without Abe’s presence, it is now unclear how Kishida can exert control over the party’s largest faction, and it can be a destablising factor. It is also unclear what will happen to the Abe faction. It could even split up.”
KOYA MIYAMAE, SENIOR ECONOMIST, SMBC NIKKO SECURITIES
“Kishida may have more leeway in pursuing policies based on his ideas, though lawmakers who were close to Abe could rally and more vocally call for sustaining Abenomics. This tension will be more visible on fiscal, rather than monetary policy.
“There likely won’t be a quick reversal of Abenomics, or an exit from ultra-loose monetary policy. In the long run, however, the Bank of Japan must consider some form of tweak to its monetary policy given problems such as the weak yen. That will mean former or incumbent Bank of Japan executives will remain strong candidates as next central bank governor.”
SHOGO MAEKAWA, GLOBAL MARKET STRATEGIST, J.P. MORGAN ASSET MANAGEMENT
“Japan’s stock market will be solid on Monday, in part because of the positive jobs data in the U.S. which was released on Friday, but also the election outcome shows stability of Japan’s politics. This is a favourable factor at a time when the political base in overseas countries such as the UK is unstable. But the market’s gains will be limited because the election outcome was already factored in.
“In the medium term, the focus will be how much the Kishida administration will shift its economic and fiscal policy away from Abenomics. But at least for now, it is unlikely that the Kishida administration will make drastic changes in positive fiscal as well as ultra-loose monetary policy – which are not positive to the stock market – when Japan is not fully recovered from the COVID-19 pandemic and concerns about economic slowdown in the U.S. and Europe loom.”
MIKITAKA MASUYAMA, PROFESSOR, NATIONAL GRADUATE INSTITUTE FOR POLICY STUDIES
“The focus has been how well the LDP and Komeito will fare and this is a pretty good outcome for the ruling bloc.
“The Kishida administration has managed to obtain a stable basis in parliament, enabling them to tackle urgent issues like responses to soaring inflation.
“(Former Prime Minister Shinzo Abe) was a leader of those who opposed Kishida in fiscal policy … Abe was a flag-bearer of those who support fiscal expansion. Those people lost their driving force. I would not say Kishida’s position within the party is rock solid, but he is now more likely than before to have better control over the party.”
JESPER KOLL, DIRECTOR, MONEX GROUP JAPAN
“There’s no question that Japan will remain a bastion of stability, in the sense of Prime Minister Kishida and his coalition partners having full control over parliament.
“This grip on power – the ability to turn proposals into laws – that Prime Minister Kishida enjoys means he will continue to rule with an iron grip.
“The LDP’s strategy of divide and rule is working very, very well. This is the first election in several elections where the opposition parties did not agree on standing behind one candidate in the various districts, so the opposition parties are actually stealing votes from each other, rather than being disciplined.”
TORU SUEHIRO, SENIOR ECONOMIST, DAIWA SECURITIES, JAPAN
“It may have become more difficult for Kishida to phase out Abenomics. It will be easier to stabilise factional friction within the ruling party by sustaining Abe’s policies. The public may also oppose any early roll-back of Abe’s policies. Taken together, the chance of Kishida succeeding Abe’s policies may have strengthened.
“Monetary policy was the centre-piece of Abenomics, and Kishida doesn’t appear to have very strong views on monetary policy. It’s become easier to continue with the path laid out under Abenomics. As for the next Bank of Japan governor, it’s likely to go to someone like Masayoshi Amamiya or Hiroshi Nakaso, career central bankers who are considered as strong candidates. It’s hard to expect any sudden interest rate hike or monetary tightening.”
SHIGENOBU TAMURA, POLITICAL ANALYST AND FORMER LDP STAFFER
“Given that the coalition has gained a majority, going over their goal, and the four parties that want to revise the constitution also have gone over the needed number of seats, you can say that this is a huge victory for the LDP. It’s a very good result for the Kishida government.
“There’s a possibility that the impact of Abe’s killing led to the victory of the LDP in hotly contested districts. They’ve also expanded their seats in proportional representation.
“I think that in governing after this, Kishida will be influenced by the idea of carrying out Abe’s wishes. That’s especially true with revising the constitution.
“The big problem is the rise of prices due to the weak yen, and what will Kishida do about economic policy? What will he do about the fact that salaries haven’t risen for decades. Facing up to this directly is essential. Demands for him to breathe life into the economy will grow. But because of the incident involving Abe, it should be easier to shift away from Abenomics.”
NOBUYASU ATAGO, CHIEF ECONOMIST, ICHIYOSHI SECURITIES, JAPAN
“The focus of this election was blurred, so it’s hard to gauge the fallout on economic policy at this stage. Having said that, there will likely be no major change to the broad policy direction.
“Abe had great communication skills and was a symbolic figurehead endorsing reflationist-minded policies. His absence will have a huge influence on the ruling party’s policies. The power of reflationists likely peaked out.
“The challenge Kishida faces is how to re-define Abenomics, and build on its accomplishments. Kishida will likely shift towards fiscal discipline, while maintaining spending to some degree. He will also give the Bank of Japan a free hand in guiding monetary policy, though much will depend on how the Ministry of Finance, and Kishida’s aides close to the ministry, act.”
COREY WALLACE, ASSISTANT PROFESSOR, KANAGAWA UNIVERSITY
“The exit polls are essentially in line with pre-election surveys by the media organisations. They suggest the LDP will do a little better in terms of overall seat numbers than they did in 2016 and 2019, but that has as much to do with opposition party weakness and weakened cooperation between the different parties.
“I cannot see any evidence in the exit polling suggesting a surge in support for the LDP that could be put down to Abe’s murder. Voter turnout also appears to be in line with expectations. A little bit up on 2019, but not much.”
MASAMICHI ADACHI, CHIEF ECONOMIST, UBS SECURITIES, JAPAN
“We can’t say there was absolutely no influence,” when asked whether Abe’s death could have affected the poll outcome. “But it seems voter turnout didn’t rise much.
“We can say Abe’s absence has taken some pressure off Kishida to ramp up fiscal stimulus … Unless the successor to head the faction Abe led within the ruling party is someone very powerful, Japan’s fiscal policy could shift slightly hawkish.”
AIRO HINO, POLITICAL SCIENCE PROFESSOR, WASEDA UNIVERSITY
“Looking at this, it appears the LDP will be able to extend its seats and there will be enough seats won through the various parties to have the two-thirds majority needed to revise the constitution. It’s pretty much as expected but the incident two days ago may well have had an impact.
“Now I think that with Kishida in power, debate over revising the constitution is likely to speed up.”
ROBERT WARD, JAPAN CHAIR, INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES
“No surprises. Need to wait now to see whether the pro-constitutional reform parties have their two-thirds majority. I still think Kishida will move cautiously, even if they do. Change will require considerable political capital – witness the intensity of the 2015 legal changes initiated by Abe to expand the role of the Self Defense Force.
“On defence, the Liberal Democratic Party manifesto promised defence spending would rise to 2% or more of GDP. Clearly, he (Kishida) now has a green light for this, although questions remain over what they’ll be spending the money on, where the money will come from.”
(Reporting by Ju-min Park, Elaine Lies, Leika Kihara, Yoshifumi Takemoto, Kiyoshi Takenaka, Junko Fujita; Editing by Chang-Ran Kim)