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Suga Tightens Grip on Japan Premier Job, Vows to Keep Abenomics

A surge in support within the ruling party all-but guarantees Yoshihide Suga’s ascension to the premier’s job in Japan.

Suga Tightens Grip on Japan Premier Job, Vows to Keep Abenomics
Yoshihide Suga, Japan’s chief cabinet secretary, listens during a news conference in Tokyo, Japan. (Photographer: Akio Kon/Bloomberg)

Japan’s Yoshihide Suga pledged to maintain outgoing Prime Minister Shinzo Abe’s ultra-easy monetary policies, as a surge in support within the ruling party all-but guaranteed his ascension to the premier’s job.

Suga, 71, told reporters Wednesday that he was running for Liberal Democratic Party president, as he appeared to have racked up an almost insurmountable lead over his two declared rivals for a party election set for Sept. 14. Among factions that have already indicated support for Suga and the dozen or so lawmakers in his own non-aligned camp, his tally already stands at 276 votes, about 10 more than he would need to assume leadership of the ruling party.

Suga Tightens Grip on Japan Premier Job, Vows to Keep Abenomics

“Personally, I want to continue Abenomics with a firm sense of responsibility, and bring it forward,” Suga told a packed news conference in Tokyo. “I’d like to keep the relationship with the Bank of Japan the same as Prime Minister Abe.”

He added that more should be done on monetary policy, if needed, to protect jobs and companies during the current crisis. While Suga said that financial firms were now needed to support pandemic-hit companies, he added that the number of regional banks might have to be reduced over the long term.

At a news conference Thursday, Suga added that mergers are an option for regional banks but said that was a matter for them to decide.

Any sign of a departure from the path of Abenomics could send the yen surging and stocks sliding, triggering a re-evaluation of the outlook for the nation. One of the first key economic decisions of the new premier will be the timing of a switch to stimulating a return to growth rather than focusing on life-support aid for businesses and households.

The yen slipped 0.2% against the dollar to trade at 106.14 at 6:50 p.m. Tokyo after Suga laid out his leadership plans Wednesday. The currency drifted lower to trade at 106.28 against the dollar at about 1:20 p.m. Thursday.

Suga also said he would be a continuity candidate on the diplomatic front, seeking to keep on an even keel the good ties Abe nurtured with U.S. President Donald Trump. He said he would press ahead with Abe’s work to resolve a territorial dispute with Russia.

Victory in the ruling party race would all but ensure Suga’s rise to become Japan’s first new prime minister in almost eight years, since the LDP holds sway over a parliamentary vote on or about Sept. 16 to confirm the new leader. The only other declared candidates -- former Defense Minister Shigeru Ishiba and ex-Foreign Minister Fumio Kishida -- face long odds.

While Ishiba has led public surveys about who should be Japan’s next leader, the party quickly coalesced behind Suga after Abe’s surprise decision Friday to resign due to health problems.

“No vacuum can be allowed,” Suga told reporters. “We have no time to lose.”

Kishida released a policy paper Thursday, saying he wants to diversify supply chains and bring overseas manufacturing back home.

Suga served as the backroom enforcer who helped Abe turn an unlikely comeback into a record-breaking run as prime minister. As spokesman, he fended off daily questions through a series of Abe government scandals.

On Tuesday, the Tuesday opted for an expedited voting system that favors lawmakers over rank-and-file members. Ishiba won the rank-and-file vote over Abe in 2012, but lost the overall race. Suga has already secured support from five of LDP’s seven biggest factions, excluding those led by Ishiba and Kishida.

Suga Tightens Grip on Japan Premier Job, Vows to Keep Abenomics

Abe first resigned from office in 2007, citing a digestive disorder. When he returned in 2012, expectations for an extended spell at the top were low. Suga’s management of the party and tighter control of the bureaucracy were among the factors that kept Abe’s administration on a steady path.

In contrast with his boss’s rarefied political pedigree, Suga hails from the rural northern prefecture of Akita and worked in a cardboard box factory when he first moved to Tokyo. He worked his way through university, before starting his political career as a secretary to a politician. He was first elected to parliament in 1996.

As Abe’s top political captain, Suga has frequently emphasized the importance of reviving the pandemic-hit economy. He’s also shown an occasional willingness to play to the public by calling for cheaper mobile phone rates and helping exempt food from the 2019 sales tax increase. On Wednesday, he reiterated that inbound tourism and exports of agricultural goods could bolster the regions.

Suga has largely echoed Abe’s foreign policy views, although he has so far avoided hawkish moves that might alarm neighbors China and South Korea, such as visiting the controversial Yasukuni war shrine, seen by many in Asia as a symbol of Japan’s past militarism.

©2020 Bloomberg L.P.