In coming months, Japanese politics are poised to become more exciting. With little more than a year left before Prime Minister Shinzo Abe’s LDP presidency ends in September 2021, slowly but surely the post-Abe succession race will intensify.
Discussions with global investors suggest that they even worry about a possible snap election coming before the end of this year because Abe’s popular support rate has dropped below 40 percent in recent months. I doubt that anyone is bold enough to challenge Abe before the U.S. presidential election. After an unprecedentedly long iron grip on power for more than seven years, however, it is now prudent to recall the wisdom of ex-Prime Minister Yasuhiro Nakasone: “In Japanese politics, three inches ahead there is darkness.”
If politics are more uncertain now, what about the economy? Do we have to worry that a personality change in the Prime Minister's Office will bring change to the way the economy is run? Here the answer is not really because, after all, this is Japan, where economic policymaking is dominated by an entrenched and able technocracy.