After A Hundred-day Honeymoon

With a little luck, the Prime Minister Shinzo Abe maintains his high level of support from public after about one hundred days from his inauguration. While there is no substantial improvement in economic fundamentals, the average of stock prices hits record high in these couple of years. Domestic politics seems to be too exhausted to fight the short hands of Abe’s policies, making the administration relatively stable. The focus is on how long this boost continues.

When he was seated as the Prime Minister, the average price of Nikkei 225 was ¥10,230. Now it is ¥12,135 on April 1, making certain difference from the beginning of his term. Although the price was already salvaged from that of DPJ administration at the beginning, the gain Abe achieved was relatively small and it is even in the tendency of declining. The price hike is now in an interval before reaching the level in pre-Lehman era.

He has not achieved a big deal so far. What he has is a promise with the Bank of Japan to raise commodity price to 2%. Although new chairman of BoJ announced that he is going to continue monetary easing until the target is achieved and that the 2% up of commodity price will be obtained within two years, there is no sign of sustainable growth. People begin to argue about the possibility of inflation without a growth of actual income.

In diplomacy, he has obtained almost no achievement. He failed in making the United States the first country to visit in his second administration, because he could not have any perspective of substantial progress on bilateral issues in the meeting with the President Barack Obama. He also has not showed any progress with Chinese government, even after the inauguration of new President, Xi Jinping. The Chinese official ships keep on invading Japanese territory around Senkaku Islands. His anachronistic view on history of Japan disturbs good will of the neighbor nations.

The relative stability of Abe administration is heavily dependent on the slump of opposite powers. DPJ is lagging behind of recovering from the damage of last general election. The Restoration Party is going to the eccentric conservatism almost nobody can follow. To the eyes of the Japanese, LDP looks like the only party, which can handle Japan properly.

Everything depends on economy. The reason why Japanese economy looks like great is because it sounds like an only gospel in world economy, which suffers from long slump. If Abe failed to show a sustainable vision for the future, Japanese economy may go to the steep decline soon.