(Bloomberg). Fumio Kishida, the Japanese Prime Minister, consolidated his month-old government through an election in which his Liberal Democratic Party avoided the worst-case scenarios suggested by opinion polls.
LDP won 261 seats to keep its majority in the lower house (465 seats), results from Monday showed. This is a drop of 276 seats that it had when parliament was dissolution. The outcome saw stocks rise, with the benchmark Topix increasing by 1.8% and the blue-chip Nikkei225 Stock Average rising more than 2%. As of Tokyo's 12:54 p.m., the yen had fallen 0.2%.
On Friday, projections published by Yomiuri, Nikkei, showed that Kishida who replaced Yoshihide Suguga as Prime Minister, was likely to struggle to keep his position without the support of Komeito, a junior coalition partner. Komeito now holds 32 seats in parliament, while Suga won three.
Kishida stated that the LDP won a majority vote and was given confidence in the election.
The LDP still has the slimmest majority since Shinzo abe took the right-leaning party from the opposition to the government and brought it back into power in 2012. Kishida may have a harder time getting his plans to increase wages, fight inequality, and spend large on economic stimulus when parliament returns later in the month.
Before next year's upper house elections, Kishida will be under pressure to improve his cabinet approval rating. After LDP insiders chose him over Taro Kono (another popular candidate), in a September leadership race, the former foreign minister has struggled with popularity.
The LDP's long-standing alliance with Komeito will still give Kishida some support on certain issues. Prior to the vote, the premier said that his goal was to win a majority in favor of the coalition.
Amy Catalinac is an assistant professor of politics at New York University and has written extensively about Japan's electoral system. He defined winning the election, as securing the bare majority, as soon as he was elected prime minister. He has made himself a fine man.
Kishida will need to make at least one person change. According to Mainichi, he will be replacing his No. Akira Amari, Secretary General of the 2 party, lost his constituency but retained a seat in parliament through the proportional representation system.
According to Naomi Muguruma (a senior analyst at Mitsubishi UFJ Morgan Stanley Securities), the distancing from Amari, who was considered a close ally, could signal a shift in emphasis on economic growth.
The results seem to be a step towards helping Kishida avoid the revolving doors through which six premiers were sent between 2007 and 2012. After Abe's record-breaking tenure on the job, Suga was only there for a year.
Although the main opposition Constitutional Democratic Party of Japan joined forces with smaller parties in order to field a single candidate in many constituencies of Japan, that strategy seemed to have failed. Results from NHK, the national public broadcaster, showed that it won 96 seats, a drop of the 109 it had when parliament was disbanded.
Ishin, a conservative-leaning party in opposition that had not joined the CDP's candidate pact, was one of the biggest winners. NHK reported that it nearly quadrupled its seats to 41 and was the third-largest party within parliament.
According to several economists, the ruling coalition will need to focus on strengthening an economy that has likely contracted over the summer because of a Covid surge in supply and bottlenecks. Kishida, who has promised to develop measures that will cost tens to trillions of dollars within the shortest time possible after the election, told NHK on Sunday night that the government would pass an additional budget before the end of this year.
His support rate will drop and he won't be able to answer questions in parliament, and people will believe they can't win the election for the upper house with him as the leader. It could become like Suga's predecessor, Shigenobu Tamura, a former LDP staffer and political analyst.
With the assistance of Emi Nobuhiro & Min Jeong Lee
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