The Liberal Democrats have been in power for most of the past fifty years, but lost office in 2009 to the Democratic Party of Japan, in the depths of the global financial crisis. In the aftermath of a devastating earthquake and tsunami, three Prime Ministers, record highs for the Yen and declining export revenue; the Japanese people have elected the LDP and its leader Shinzo Abe as their government, following Sunday’s general election. The LDP enjoyed a landslide victory taking nearly 300 of the 480 parliamentary seats – with the support of its coalition partner, New Komeito, the government will command a two thirds majority in the lower chamber, giving it power to overturn decisions in the upper house.
The outgoing DPJ saw their representation in the lower house fall from 230 to 57 seats and outgoing Prime Minister Yoshihiko Noda has resigned as its leader. The LDP have been arguing for a weaker Yen and in the wake of the elections, the stock market has rallied and the Yen has fallen against other major currencies. The Nikkei rose by 1% and the Yen hit a 20 month low against the US Dollar; it is currently trading at 84.0450.
The LDP has said that it wants the Bank of Japan to adopt monetary policies which will weaken the Yen and reverse a 20 year trend in price deflation. They have suggested that they would like to see the BOJ under closer government influence. In an interview with the BBC, Yuuki Sakurai, chief executive of Fukoku Capital Management noted: "The fact that Abe points to changes in the BOJ law or forex levels, or aggressive easing as solutions to Japan's problems is, if anything, worrying.
They should be treated as tools to buy time to implement structural reforms, but we're not hearing anything about deep reforms that the LDP wants to carry out."
Mr Abe is said to be hawkish in foreign policy matters and has argued that Japan should drop its pacifist constitution. This will do little to defuse tension with China over the sovereignty of uninhabited islands in the East China Sea.
Liberal Democrats Return To Power
Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.