Source: fmyokohama.co.jp This week was punctuated by the speech by PM Abe on Tuesday outlining the third `arrow` of the three-pronged strategy aimed at bringing about growth in the Japanese economy. According to PM Abe`s speech (J), the third part of `Abenomics` consists of encouraging private industry to invest in developing economies (particularly those in Southeast Asia and Africa), promoting the use of the internet for international sales, the formation of a `regulatory reform committee` to examine how Japan`s domestic regulations might be modified, and the creation of a `special economic district` to encourage multinationals to set up shop in Tokyo. It must be said, however, that the content of this speech was met with far less enthusiasm than PM Abe`s previous announcements. As Kishi Hiroyuki outlined in this piece (J), PM Abe`s strategy does not actually bring about any substantial reforms to the pre-existing Japanese economic model, as many of the suggestions put forward by private industry to government-sponsored focus committees (a reduction in corporate taxes, further reform to labour laws, and fundamental reform of the agricultural sector) were not included in the latest strategy.
Of course, the possibility remains that PM Abe is merely biding his time until the outcome of the House of Councillors election on July 21 is known, after which he may have the numbers to push through with more substantial changes to the Japanese economic model (among other considerations). Indeed, one fear that many in the business sector have is that once the LDP/Komeito coalition have control of both houses, PM Abe will become distracted by issues concerning constitutional reform and cultural matters. Uncertainty about the stability of the yen is also creating waves, for MOF`s figures released on the 3rd of June showed that despite a rise in net operating profits in the manufacturing sector (by 21.9% in the first quarter of this year), actual sales dropped by 6.6% compared to the same quarter last year (J). What emerges is a picture of an economy whose profits are being driven by a weaker yen but which is not expanding through a greater volume in sales. The manner in which Japanese stocks have risen and dropped over the past week is a reflection of those figures, for while there is some confidence that Japan`s economy is growing, there is less certainty that the economy has the means to promote growth over the four quarters.
In the meantime this week also saw a number of parties begin to make their moves towards promoting candidates and policies for the Upper House election. While the Communist Party essentially changed nothing in their plans for keeping Japan stuck in an historical rut (the manifesto might more accurately be described as a plan for the status quo, with no prospect of growth and a reckless disregard for Japan`s current security environment – as seen here (J), the Restoration Party were spruiking the announcement that they had secured the services of Antonio Inoki as a candidate for the Upper House (J). This was not entirely unexpected, given that elections in Japan tend to attract celebrity candidates as a means of attracting voters to booths, and right now the Restoration Party needs all the PR assistance it can get. Inoki has previously served in the Upper House as a member of the defunct Sports Peace Party (1989), and was instrumental in having 41 Japanese released from custody after being captured in Kuwait in the opening stages of the first Iraq War, not to mention his role as a negotiator with North Korea (Kim Jong Il having been a fan of Inoki`s pro wrestling work).
This is where things could get dicey, as Inoki clearly has a more conciliatory stance towards relations with neighbouring countries than some of his Restoration Party colleagues. If it comes to pass that the Restoration Party supports changes to the constitution proposed by the LDP/Komeito in the Lower House but finds its Upper House representatives less willing to compromise, it will make for some very interesting internal party dynamics (and Inoki is unlikely to be intimidated by either Hashimoto or Ishihara). This is just the first stage in the announcement of candidates, hence just who is dredged up from among the masses to have their fifteen minutes in the political spotlight will become a regular talking point before the election. Celebrity candidates are a double-edged sword, however, as demonstrated by Tani Ryoko`s less-than-stellar performance as a Councillor for the DPJ and now the People`s Lives Party.
Of course, the possibility remains that PM Abe is merely biding his time until the outcome of the House of Councillors election on July 21 is known, after which he may have the numbers to push through with more substantial changes to the Japanese economic model (among other considerations). Indeed, one fear that many in the business sector have is that once the LDP/Komeito coalition have control of both houses, PM Abe will become distracted by issues concerning constitutional reform and cultural matters. Uncertainty about the stability of the yen is also creating waves, for MOF`s figures released on the 3rd of June showed that despite a rise in net operating profits in the manufacturing sector (by 21.9% in the first quarter of this year), actual sales dropped by 6.6% compared to the same quarter last year (J). What emerges is a picture of an economy whose profits are being driven by a weaker yen but which is not expanding through a greater volume in sales. The manner in which Japanese stocks have risen and dropped over the past week is a reflection of those figures, for while there is some confidence that Japan`s economy is growing, there is less certainty that the economy has the means to promote growth over the four quarters.
In the meantime this week also saw a number of parties begin to make their moves towards promoting candidates and policies for the Upper House election. While the Communist Party essentially changed nothing in their plans for keeping Japan stuck in an historical rut (the manifesto might more accurately be described as a plan for the status quo, with no prospect of growth and a reckless disregard for Japan`s current security environment – as seen here (J), the Restoration Party were spruiking the announcement that they had secured the services of Antonio Inoki as a candidate for the Upper House (J). This was not entirely unexpected, given that elections in Japan tend to attract celebrity candidates as a means of attracting voters to booths, and right now the Restoration Party needs all the PR assistance it can get. Inoki has previously served in the Upper House as a member of the defunct Sports Peace Party (1989), and was instrumental in having 41 Japanese released from custody after being captured in Kuwait in the opening stages of the first Iraq War, not to mention his role as a negotiator with North Korea (Kim Jong Il having been a fan of Inoki`s pro wrestling work).
This is where things could get dicey, as Inoki clearly has a more conciliatory stance towards relations with neighbouring countries than some of his Restoration Party colleagues. If it comes to pass that the Restoration Party supports changes to the constitution proposed by the LDP/Komeito in the Lower House but finds its Upper House representatives less willing to compromise, it will make for some very interesting internal party dynamics (and Inoki is unlikely to be intimidated by either Hashimoto or Ishihara). This is just the first stage in the announcement of candidates, hence just who is dredged up from among the masses to have their fifteen minutes in the political spotlight will become a regular talking point before the election. Celebrity candidates are a double-edged sword, however, as demonstrated by Tani Ryoko`s less-than-stellar performance as a Councillor for the DPJ and now the People`s Lives Party.
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