Two gunshots made a huge echo in Japan. As Japan's longest-serving prime minister in half a century, Shinzo Abe has left a huge legacy to Japan's politics and economy. Among them, the most far-reaching impact on Japan's economy is undoubtedly the "Abenomics" that lasted for nearly ten years. Now, Japan's three-year Senate re-election vote has come to an end. The ruling alliance formed by the Liberal Democratic Party and Komeito Party where Abe lived won more than half of the seats. With the death of Shinzo Abe, can the so-called "Abe economics" continue to persist in the future?
Kishita government "midterm exam"
local time, on July 11, Japan's 26th Senate election was announced, and the ruling Liberal Democratic Party won more than half of the re-elected seats alone. In addition, constitutional amendment forces won more than two-thirds of the majority in the Senate, breaking the "threshold" required for constitutional amendment motions.
Just two days before the Senate election, Abe was shot in Nara and eventually died of excessive blood loss. At that time, he was giving a speech on the election assistance to the candidates for the Liberal Democratic Party Senate.
Japanese Liberal Democratic Party President and current Prime Minister Fumio Kishida said after the election vote: "When violence is shaking the foundation of the election, it is very important that we can unite the election."
Senate election is of great significance. It is positioned as the "midterm exam" of the Japanese government and is also a "test paper" for the current Prime Minister Fumio Kishida. Japanese senator's term of office is 6 years, and half of the election is re-elected every 3 years. This time, the government and opposition parties will compete for 125 seats.
Statistical results show that among the 125 re-elected seats, the Liberal Democratic Party in the ruling coalition won 63 seats and the Komeito Party won 13 seats, far exceeding the "more than half" target set previously. With the 70 seats not re-elected, the ruling coalition has 146 seats in the Senate.
Political analyst Shigenobu Tamura, a former LDP staffer, said that the assassination of Abe may have increased the ruling party's support rate in "a fiercely competitive constituency." According to Kyodo News, voter turnout is expected to rise to 51.58% from 48.8% of Senate elections three years ago.
On the afternoon of the same day, Fumio Kishida held a press conference on the elections of the 26th Japanese Senate. Fumio Kishida said that in this Senate election, the Liberal Democratic Party won 63 seats, far exceeding expectations.
If the House of Representatives is not dissolved, there will be no congressional and Senate elections in the next three years. Some analysts believe that if Kishida Fumio won this Senate election, he could not disband the House of Representatives in the middle until the expiration of 2025, and usher in the "golden three years" without a national political election. He could also use this period to promote important issues such as constitutional revision.
Kishida Fumio said that the current development of Japan's economy is the concern of the people, and the government has the responsibility to solve the economic and livelihood issues. He also pointed out that Japan is currently in the biggest dilemma after World War II. Two important points in future regime operation are: extensive listening to opinions, as well as decisiveness and execution.
In addition, regarding issues such as rising domestic prices in Japan, Fumio Kishida said that he will focus on energy and food supply.
At present, Japan is facing problems such as rising prices and insufficient electricity supply, which puts pressure on the Kishida government. Polls show that the most popular topic in this election is "countermeasures for rising prices and economic policies." Japanese companies hope that more than half of the economic-related policies implemented by the Japanese government will answer "countermeasures for rising prices."
The constitutional amendment process may speed up
After this election, political parties open to constitutional amendment are expected to exceed two-thirds of the seats necessary to file a constitutional amendment motion in the Senate. Previously, the forces supporting constitutional amendment have retained two-thirds of the seats in the Japanese House of Representatives, which means that Japan's constitutional amendment process may be accelerated after this election, and Kishida Fumio may be able to amend Japan's peace constitution, which is a goal that Abe has never achieved before.
As early as 2007, the first time the Abe cabinet took the first step to promote constitutional amendment, and the Senate voted to pass the National Referendum Act that stipulates the procedures for amending the constitution. In 2012, Shinzo Abe proposed a constitutional amendment plan on the eve of his second administration, but he did not achieve this goal until he resigned as prime minister in 2020.
In September 2020, Abe's successor Yoshihide Suga also expressed his intention to amend the constitution after being elected as the president of the Liberal Democratic Party. Fumio Kishida has also repeatedly stated that he intends to promote the passage of the Liberal Democratic Party's four constitutional amendments, including clearly tying the contents of the Self-Defense Forces in Article 9 of the Constitution. The Nikkei Shimbun said that the Liberal Democratic Party has also written up its defense spending in its campaign program, advocating that it will increase defense spending to more than 2% of Japan's GDP.
Associate Professor Li Jiacheng of the School of International Relations of Liaoning University said that after Shinzo Abe stepped down as Prime Minister of Japan, he was still the leader of the Abe Department, the largest faction in the Liberal Democratic Party of Japan, and still influenced Japan's political situation. Previously, Abe's main goal was to amend the constitution, seeking to clearly position the existence of the Self-Defense Force in the constitution and make Japan a "normal country." After the current Japanese Prime Minister Fumio Kishida, who is the same as Abe, came to power, he was also promoting Japan's constitutional amendment.
Previously, when asked about constitutional amendment, Fumio Kishida said that he would focus on formulating a bill for Congress to discuss. However, Robert Ward of the International Institute of Strategic Studies believes that Fumio Kishida may be cautious about constitutional amendment. But this big victory could pave the way for increased defense spending — a key promise made by the Liberal Democratic Party in the election.
"Abenomics" is invalid?
After Shinzo Abe became prime minister, he implemented a loose economic policy, which is called "Abenomics", which has had a profound impact on the Japanese economy in the past 10 years.
Wu Xinru, professor of economics at East China Normal University, pointed out that the specific policies of "Abenomics" include: setting a 2% inflation target, reducing the policy interest rate to negative, implementing unlimited quantitative easing monetary policy, large-scale public investment, Japanese banks' open market purchase of constructive government bonds, and increasing the government's voice over the central bank. These policies have all prompted the weakening of the yen trend.
Statistics show that since the launch of "Abenomics", the yen exchange rate has depreciated by about 37.5% compared with the US dollar, the Nikkei index has risen by about 163%, Japan's 10-year interest rate has fallen by about 77 basis points, the Bank of Japan's government bond assets have expanded significantly, Japan's nominal and real GDP has risen by 9% and 4.5% respectively, and Japan has also escaped from the deflation.
But at present, many people think that the most important arrow of "Abenomics" - ultra-loose monetary policy is becoming out of place. Due to the loose policy stance, the yen exchange rate against the US dollar has fallen to a low of more than 20 years, once falling below the 136 yen mark of US dollar.
And for many Japanese, the most disappointing thing is that reforms aimed at reshaping the Japanese economy and being the third arrow have proved difficult to achieve. Japan's economy is staggering due to low productivity, rapid aging population and rigid labor markets.
According to media reports, a person close to Fumio Kishida said that Kishida's team hopes to gradually cancel "Abenomics". Analysts say that after Shinzo Abe's death and the Liberal Democratic Party won the Senate election, Fumio Kishida may now have the political capital to change the policy line, and he will have three years to push legislation through the next round of elections.
Koya Miyamae, senior economist at Sumitomo Bank Nikkei Securities, said: "Kishida Fumio may have more room for maneuver in implementing policies based on his own propositions, but lawmakers close to Abe can unite and call for the maintenance of Abe's economics more loudly."
(Tao Feng Zhao Tianshu)
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