Markets rise in Japan to greet new premier

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The Independent Online

Shares in Japan jumped today on hopes for the world's third-largest economy as Shinzo Abe was voted in as the new Prime Minister.

The election earlier this month of Mr Abe, who quit the post five years ago in ignominy and tears, was overwhelmingly approved by lawmakers in the lower house, giving the new leader a mandate to tackle Japan's stagnant economy, which has entered its fourth recession since 2000.

Mr Abe has promised to spur growth with a huge boost in public works spending and to jolt Japan out of years of deflation by persuading the country's central bank to print billions of extra yen.

In trading in Tokyo, the benchmark Nikkei 225 index rose 1.5 per cent to 10,230.36, continuing a run that has seen it climb to its highest for nine months. The yen also dropped against the dollar to its weakest for 20 months.

The approval also gives the new leader a mandate to take a tougher line with China. Tokyo and Beijing have been at loggerheads for months over a chain of tiny disputed islands in the East China Sea, a row that has damaged Japanese exports to China.

Mr Abe has appointed several hawkish allies to key cabinet posts, including Yoshihide Suga as chief cabinet secretary and the former prime minister Taro Aso as minister for finance. The new education minister, Hakubun Shimomura, is known to share Mr Abe's controversial revisionist views on Japan's war history.

However, analysts say he has also been careful to signal a potential diplomatic route out of Japan's stubborn territorial disputes with Beijing and Seoul. Fumio Kishida, an experienced negotiator and veteran of several cabinets, is the country's new top diplomat.