While the world focuses on the gathering of cardinals in Rome to choose a successor to Pope Benedict XVI, a similar conclave is under way in Tokyo to choose the Bank of Japan's (BOJ) next governor. And, as with the deliberations at the Vatican, politics, not doctrinal debate, is underpinning the decision-making process in Japan.
In December, Liberal Democratic Party president Shinzo Abe won back control of the government for the LDP after more than three years in opposition, securing the post of prime minister for the second time. In his election campaign, and since coming to power, Abe has advocated a radical revitalization of the Japanese economy that would end two decades of deflation and growing political and strategic uncertainty.
In anticipation of an LDP-led government (with the Komeito party as a junior coalition partner), financial markets began to move toward positions favoring a weaker yen. Japan's stock market reacted favorably as well, rising almost 30 percent since the vote.