Japan’s Future at Stake in Oct. 31 Vote, Premier Kishida Says

15 Oct 2021, 05:07 AM IST

(Bloomberg) -- Japanese Prime Minister Fumio Kishida started a formal process for an Oct. 31 vote he said will be a choice for the country’s future -- and could also determine how long he remains in office.

Under Kishida’s directive, Japan dissolved parliament Thursday to set the wheels in motion for the election that comes a little more than three weeks after he became prime minister. Any major loss of seats could undermine the premier’s ruling Liberal Democratic Party’s faith in his leadership, increasing the chances he’ll be dispatched through the “revolving door” that claimed six Japanese premiers between 2007-2012.

“This lower house election is about choosing the future of Japan,” Kishida said at a news conference later Thursday, adding the public can rest assured by keeping him at the helm.

But there is not much time for the banker-turned-politician to win over the public. He enters the race with some media surveys showing him as having the lowest approval ratings for a new leader since the financial crisis of 2008.

The premier said he wants to maintain his ruling coalition’s majority in the 465-seat House of Representatives, a modest target he’s almost certain to achieve. That would allow for a significant reduction in numbers, given that the LDP and its junior partner Komeito together controlled more than 300 seats before dissolution.

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While none of the opposition parties boast support of more than single figures, they’ve forged an alliance that includes the Japanese Communist Party, which is cooperating in many constituencies to try to chip away at the ruling coalition’s majority.

Kishida has focused his election pledges on building a “new capitalism” in which the fruits of economic growth are spread more widely. Markets initially gave the plan a thumbs down, sending the Nikkei 225 Stock Average on its longest losing streak since 2009 at the start of this month.

The new prime minister has distanced himself from an earlier proposal to increase a capital gains tax on securities investments following a market backlash. Opposition leaders accused him Thursday of flip-flopping on the tax and being “inconsistent” in his pledges, Kyodo News reported.

“There is no stepping back from what I have conveyed as my policy,” Kishida said at the news conference.

Kishida said his government would lay out its basic plans Friday for virus recovery. In-person diplomacy that could include a possible meeting with U.S. President Joe Biden would kick into full gear after the Oct. 31 vote and his administration would decide on its economic recovery package amounting to tens of trillions of yen after the election, he said.

Japan has seen the virus situation improve dramatically as new cases are dwindling from an August peak and about two-thirds of the population are fully vaccinated.

The premier’s policies include increasing pay for some public sector workers and strengthening tax breaks for companies that increase salaries. Kishida has nonetheless said he’ll maintain the easy monetary policy of his former boss, Shinzo Abe.

Amid growing fears over tensions around Taiwan, Kishida has indicated he’ll continue to try to strengthen Japan’s alliance with the U.S. while maintaining dialogue with China, his country’s biggest trading partner.