Asian stocks rose on Monday, boosted by Friday’s strong jobs numbers in the USA and a victory for the coalition led by Prime Minister Shinzo Abe in Sunday elections for the upper house of the Japanese parliament.
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There is also growing speculation that Abe may seek an extension as party leader, though LDP leaders generally step down after two terms to give a chance to others.
On Sunday, Australia’s Prime Minister Malcolm Turnbull declared his ruling coalition won the extremely close election, although the counting of votes continues more than a week after the actual vote.
The LDP’s junior coalition partner, Komeito, avoided any mention of the constitution in its manifesto.
“I set a goal to win the majority of contested seats as I went to the people”, Abe told CNN affiliate NHK on Sunday.
With their pro-business policies, the Liberal Democrats have ruled Japan nearly continuously since World War II, and until recently enjoyed solid support from rural areas.
The Democratic Party stumbled badly in its last stint in power, notably in its response to the 2011 quake and Fukushima nuclear disaster. The opposition, however, fell out of favour after being heavily criticized over its reconstruction efforts.
THE QUOTE: “Abe has always been supportive of quantitative easing, thus his victory has brought more hope to the market that we will probably see a new round of “Abenomics” soon”, said Margaret Yang of CMC Markets in Singapore. “So for constitutional change as well, he will probably come up with a large-scale economic package”, said Daiji Aoki, senior economist at UBS Securities Japan.
Abe’s ruling coalition won a landslide in an election for parliament’s Upper House.
Tetsuro Kato, professor of politics at Waseda University, said Abe won’t rush to change the constitution, saying he needs better timing because the recent strengthening of the yen – a minus for exports – and concerns about global economic growth.
It technically bans the maintenance of the military, but has been interpreted to allow armed forces for self defence and most recently was stretched to enable Japan to assist if its allies are under attack.
Others, however, argue that a loosening of military restrictions is required in the face of China’s increasingly assertive military presence and North Korea’s perceived nuclear threat.
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Some economists say public spending on infrastructure is needed to compensate for the private sector’s reluctance to invest in plants and equipment.
