Five Takeaways From Japan’s Upper House Election

Isabel Reynolds
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Five Takeaways From Japan’s Upper House Election

(Bloomberg) -- Japanese Prime Minister Shinzo Abe’s ruling coalition won their sixth straight national election victory in Sunday’s upper house election, but fell short of the supermajority needed to launch a bid to change the pacifist constitution.The results, which were in line with expectations, had little effect on stock or bond markets in early trading Monday, while the yen weakened slightly.Here are some of the main takeaways.1\. Sales tax hike to go aheadAbe said the election result showed he had gained understanding from voters for his plan to raise the sales tax to 10% in October from 8% currently. However, an NHK exit poll showed 57% of respondents opposed the plan, which is intended to help rein in the world’s biggest debt load that stems from increased social welfare spending for Japan’s rapidly aging population.2\. Talk of a fourth term for Abe is re-emergingThe main ruling Liberal Democratic Party has already changed its rules to allow Abe to serve three straight terms as party leader. His latest election victory spurred the party’s Secretary General, Toshihiro Nikai, to say that “the people seemed to be hoping for” a fourth term.Abe himself -- already set to become the country’s longest-serving premier in November -- said he wasn’t thinking of staying on beyond the end of his current term, which ends in 2021, the Nikkei newspaper reported. Abe’s cabinet and party executive reshuffle, which the paper said is to come in September, may offer clues on the party’s succession plan.3\. Constitutional change will take workAbe did not gain the two-thirds majority in the upper house needed in addition to the existing supermajority in the lower house to send a constitutional revision to a national referendum. That doesn’t mean he will give up on his plan to add wording to the U.S.-drafted pacifist document to make explicit the legality of Japan’s Self-Defense Forces, but it does make it more difficult to achieve.In television interviews on Sunday night, Abe said it was his duty to press ahead with revisions to the seven-decade-old document, adding he would seek cooperation from members of the opposition Democratic Party for the People, some of whom are in favor of constitutional change.4\. Abe faces diplomatic challengesThe end of the campaign will enable Abe to refocus on the diplomatic issues piling up in his inbox. A dispute with South Korea rooted in historical animosity over Japan’s past colonization of the Korean Peninsula shows no signs of fading. With U.S. National Security Adviser John Bolton visiting Tokyo this week, Abe may be pressed to have the Self-Defense Forces play a role in a coalition meant to ensure the security of the Strait of Hormuz amid rising tensions. He said Sunday night he wanted to examine the details of the U.S. plan.5\. More diversity in parliamentA record of about 28% of the candidates who ran in the election were female, according to the Nikkei. Twenty-eight women won seats, equaling a record set in the previous upper house election. Before Sunday’s vote, women held about 20% of the seats in the upper house, compared with just over 10% in the more powerful lower house, which places Japan 163rd out of 191 countries classified by the Inter-Parliamentary Union in terms of female representation.New party Reiwa Shinsen, which made diversity a key theme of its campaign, got two of its candidates elected, both of them severely disabled, Jiji Press and other media reports said. The 83-year-old parliament building may need some adaptations to accommodate the new members.(Updates with details throughout.)\--With assistance from Karen Leigh.To contact the reporter on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.netTo contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Kazunori TakadaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

(Bloomberg) -- Japanese Prime Minister Shinzo Abe’s ruling coalition won their sixth straight national election victory in Sunday’s upper house election, but fell short of the supermajority needed to launch a bid to change the pacifist constitution.

The results, which were in line with expectations, had little effect on stock or bond markets in early trading Monday, while the yen weakened slightly.

Here are some of the main takeaways.

1. Sales tax hike to go ahead

Abe said the election result showed he had gained understanding from voters for his plan to raise the sales tax to 10% in October from 8% currently. However, an NHK exit poll showed 57% of respondents opposed the plan, which is intended to help rein in the world’s biggest debt load that stems from increased social welfare spending for Japan’s rapidly aging population.

2. Talk of a fourth term for Abe is re-emerging

The main ruling Liberal Democratic Party has already changed its rules to allow Abe to serve three straight terms as party leader. His latest election victory spurred the party’s Secretary General, Toshihiro Nikai, to say that “the people seemed to be hoping for” a fourth term.

Abe himself -- already set to become the country’s longest-serving premier in November -- said he wasn’t thinking of staying on beyond the end of his current term, which ends in 2021, the Nikkei newspaper reported. Abe’s cabinet and party executive reshuffle, which the paper said is to come in September, may offer clues on the party’s succession plan.

3. Constitutional change will take work

Abe did not gain the two-thirds majority in the upper house needed in addition to the existing supermajority in the lower house to send a constitutional revision to a national referendum. That doesn’t mean he will give up on his plan to add wording to the U.S.-drafted pacifist document to make explicit the legality of Japan’s Self-Defense Forces, but it does make it more difficult to achieve.

In television interviews on Sunday night, Abe said it was his duty to press ahead with revisions to the seven-decade-old document, adding he would seek cooperation from members of the opposition Democratic Party for the People, some of whom are in favor of constitutional change.

4. Abe faces diplomatic challenges

The end of the campaign will enable Abe to refocus on the diplomatic issues piling up in his inbox. A dispute with South Korea rooted in historical animosity over Japan’s past colonization of the Korean Peninsula shows no signs of fading. With U.S. National Security Adviser John Bolton visiting Tokyo this week, Abe may be pressed to have the Self-Defense Forces play a role in a coalition meant to ensure the security of the Strait of Hormuz amid rising tensions. He said Sunday night he wanted to examine the details of the U.S. plan.

5. More diversity in parliament

A record of about 28% of the candidates who ran in the election were female, according to the Nikkei. Twenty-eight women won seats, equaling a record set in the previous upper house election. Before Sunday’s vote, women held about 20% of the seats in the upper house, compared with just over 10% in the more powerful lower house, which places Japan 163rd out of 191 countries classified by the Inter-Parliamentary Union in terms of female representation.

New party Reiwa Shinsen, which made diversity a key theme of its campaign, got two of its candidates elected, both of them severely disabled, Jiji Press and other media reports said. The 83-year-old parliament building may need some adaptations to accommodate the new members.

(Updates with details throughout.)

--With assistance from Karen Leigh.

To contact the reporter on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Kazunori Takada

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.