Deep dissatisfaction with the record of the Democratic Party in government over the past three years has given the resurgent Liberal Democrats a two-thirds working majority with allies in Japan’s lower house. Last weekend’s general elections also saw the return of former conservative prime minister Shinzo Abe to power on a platform of economic stimulus at home and a more assertive nationalism in foreign policy.
He is more assured of success with the first than the second priority. Japan’s economy is in danger of entering a third recession in a 20-year cycle of relative decline and Mr Abe is determined to head that off. He wants the Bank of Japan to ease monetary policy to encourage private investment and he would stimulate that further by issuing government bonds for large infrastructure projects. The formula is fully in keeping with his party’s traditional preference for pork barrel politics, but at this juncture it does make sense in macroeconomic terms. Business groups are pleased with his victory, a feeling likely to be reinforced assuming he reopens as promised the country’s many nuclear plants closed since the Fukushima tsunami disaster last year.
Mr Abe would need to tread more carefully here. A widespread fear that reckless incompetence in the nuclear industry endangers Japanese lives could see his electoral mandate erode ahead of next July’s elections to the Diet’s upper house. The same cautionary advice applies to the disputes with South Korea and China over the two groups of islands Mr Abe claims are Japanese and over other symbols of what its neighbours see as his aggressively permissive attitudes to the country’s imperial past and war crimes. The Japanese electorate has demonstrated a new volatility in this election and the previous one, triggered by impatience with governing failures. They would not necessarily thank Mr Abe for ratcheting up regional instability, possibly endangering the strong economic relations with the Koreans and Chinese on which their prosperity now depends.