Shinzo Abe was reelected prime minister by the Diet on Wednesday after the ruling bloc of his Liberal Democratic Party and Komeito was returned to a two-thirds majority of the Lower House in last week's general election. His gambit to solidify his power base by holding the snap election while the divided opposition was unprepared paid off. The question now is how Abe tackles pending challenges, including the slowing economy and legislation to implement his Cabinet's controversial decision to enable Japan to engage in collective self-defense.
Abe has claimed that the outcome was a vote of confidence in his administration. But it would be presumptuous for the prime minister and the LDP to assume that his policies have won a resounding public endorsement, given that the party won less than half the popular votes cast in an election that saw a historically low turnout as nearly half the electorate abstained from voting. Abe also called the election a public referendum on his "Abenomics" policies, and the LDP's big wins mean his administration will likely stay the course on the economic front. But his success at the polls in itself will not fix the problems that confront the economy, which posted two consecutive quarters of decline in gross domestic product.
Over the past year, quarterly GDP growth took place only in the January-March period, when people rushed to buy ahead of the consumption tax hike in April. Consumer spending, which accounts for 60 percent of the nation's GDP, has continued to decline sharply since April as people's net income fell for 16 consecutive months as price increases outpaced wage hikes. The yen's steep fall against the dollar, backed by the Bank of Japan's large-scale monetary stimulus, has pushed up the earnings of major firms to record highs and led share prices to surge 70 percent in the first two years of the Abe administration. But the weak yen is no longer a cure-all for the Japanese economy and has hurt both consumers and many businesses by pushing up import costs.