"The economy is at the bottom. It's our first mission to turn it around," Shinzo Abe says
Abe, 58, is the nation's seventh prime minister in six years
He faces a major task of reviving the economy and making a decision on nuclear power
The Japanese parliament elected Shinzo Abe as prime minister Wednesday, giving him a second chance at the same job five years after he resigned abruptly.
Abe, 58, is the nation’s seventh prime minister in six years. He started the revolving door of prime ministers by resigning in 2007, just one year into the job.
The leader of the Liberal Democratic Party has vowed to boost the economy and defend Japanese interests, including territorial disputes with China over a group of islands.
Asia’s first and second largest economies have been embroiled in a trade dispute over the islands in the East China Sea. Both nations claim the islands.
China was outraged when Japan nationalized the islands in September.
In retaliation, Chinese consumers slowed their purchases of Japanese products, dropping Tokyo’s exports to China by more than 14% that month.
Some investors believe the second coming of Abe will be good for Japan’s equity markets.
“Investors are pricing in … much greater monetary easing,” said Ben Collett, head of Japanese equities at Louis Capital Markets in Hong Kong.
In November, Abe called for unlimited monetary easing to jumpstart the economy. He also urged the Bank of Japan to raise its current 1% inflation goal to as much as 3%.
Since then, investors betting on an Abe administration have pushed the Tokyo Nikkei up by more than 10%.
Then there’s the question of how Japan powers itself amid the backlash against nuclear energy following the meltdown of Fukushima nuclear reactors. The reactors melted after a powerful earthquake and tsunami in March last year.
Abe’s party has called for safety tests on all nuclear plants over the next three years. Those that pass should be brought back online, he has said.
He’ll also have to deal with the enduring task of cleaning up communities shattered by the earthquake and tsunami, and contend with local anger that the recovery seems to have stalled.
Prime Minister Yoshihiko Noda pledged to step down as party president after exit polls showed a smashing loss in lower house voting. The party, once seen as a breath of fresh air in Japanese politics, came to be regarded as increasingly ineffective.
Noda conceded defeat in parliamentary elections, signaling the return to power of the conservative Liberal Democratic Party that ruled the country almost continuously since its establishment in 1955. It was forced from power three years ago by Noda’s party.
The LDP is inheriting a struggling economy, regional tensions and questions over Japan’s role in Asia.
“The economy is at the bottom. It’s our first mission to turn it around,” Abe said.
Abe said plans to take a strong stand Japan’s territorial disputes with China and its other neighbors but also seek to improve relations with Beijing.
Since assuming power in September 2011, Noda has struggled to contend with the country’s economic struggles. His deal-making over a financial bill effectively ended his term, forcing him to dissolve the lower house in exchange for opposition support.