Abenomics and Shinzo Abe get renewed endorsement from Japanese electorate

More stimulus measures needed to counter stalling economy

The Liberal Democratic Party's four-year renewed mandate in Japan is as much a victory for so-called "Abenomics" as for party leader Shinzo Abe. Albeit distinctly half-hearted – the lowest turnout since the second World War reflects barely one in two voters (52 per cent) sufficiently motivated to vote. In part that is a measure of the disarray in the ranks of the opposition, but also a sense by voters that Abe's economic medicine has yet to manifest itself in improved living standards. The best they could say for it was perhaps a grudging acceptance that it was necessary, but that didn't mean they had to like it.

With the economy stalling, Abe now has to move beyond the fiscal and monetary stimulus that brought an end to deflation in his first two years by implementing his “third arrow”, the structural reform of markets. That will mean taking on vested interests like the small farmers who have blocked negotiations on a Trans-Pacific Partnership trade deal with the US.

But he also has to face down big companies with record cash holdings in hand to raise wages in line with inflation and to increase investment. Static consumer demand, not least because of an ill-judged hike in consumption tax, is undoing his best efforts. “I request people in the business community to make utmost efforts to increase wages next spring,” he told business and union leaders. “I want the effects of Abenomics to penetrate every corner of the nation with pay increases next year and the year after.”

Abe has also insisted that his re-election is a mandate to advance constitutional change that will amend the prohibition on military collective self-defence and the country's right to defend allies. Not easy politically – his coalition ally, the pacifist Komeito party, gained seats in the election and much of the public remains wedded to the country's post-war pacifism. The move will be welcomed by allies like the US, but may serve to raise already fraught tensions with neighbours like China and Korea where Abe's nationalism and willingness to gloss over his country's wartime record has caused real difficulties.