Abe’s ‘shock and awe’ tactics win approval
Tuesday 23 July 2013
Japan’s Prime Minister, Shinzo Abe, has won fresh backing at the ballot box for his “shock and awe” strategy to revive the economy, sending Asian shares higher.
Mr Abe’s coalition now has control of both houses of the Japanese parliament for the first time in three years – helping the leader press ahead with his “third arrow” of structural reforms to shake the country out of its lengthy malaise.
His coalition won 76 of 121 seats up for election, giving it 135 seats in the upper house. He has already begun a huge monetary stimulus and a public spending programme with the Bank of Japan, boosting exports with a much weaker yen since taking office and pushing the economy to 1 per cent growth in the first three months of the year. A similar pace is expected in the second quarter.
Chris Scicluna, head of economic research at Daiwa Capital Markets Europe, said: “Abe has dramatically shifted the Japanese economy on to a growth trajectory – now he needs to make sure that it stays there.”
Mr Abe now has more political capital but he still has to battle against vested interests on a range of mooted reforms, from making the nation’s labour market more flexible to joining the Trans-Pacific Partnership regional trade agreement. Michael Hewson, an analyst at CMC Markets, said: “Abe has got no excuses now: the market has given him the benefit of the doubt. We could be about to find out whether it is more ‘bow and arrow’ than ‘third arrow’.”
The premier also has a difficult decision to make on whether to press ahead with the proposed rise in VAT from next April, from 5 per cent to 8 per cent, to shore up Japan’s public finances. Many experts fear the move could hit the recovery.
A further rise to 10 per cent is slated for October 2015.
- 1 Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
- 2 Rarest Beanie Baby of them all could be sold for £62,500 on eBay
- 3 Professional big game hunter Ian Gibson crushed to death by elephant during hunt
- 4 Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
- 5 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
Yemen crisis: Meet the child soldiers who have forsaken books for Kalashnikovs
Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
Rarest Beanie Baby of them all could be sold for £62,500 on eBay
Professional big game hunter Ian Gibson crushed to death by elephant during hunt
Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...