BREAKING NEWS

Japan PM campaigns on "stability" ticket as Brexit rocks markets

By REUTERS

JUNE 27, 2016 06:52

TOKYO- Japanese Prime Minister Shinzo Abe, stumping for a July upper house election, is warning voters against casting their ballots for the opposition at a time when world financial markets are in turmoil after Britain's shock vote to leave the European Union.

Abe's ruling bloc already looked set for a hefty win in the July 10 election but experts said the uncertainty spawned by Brexit was likely to persuade Japan's cautious voters to give his coalition even greater backing.

The shift could give Abe's Liberal Democratic Party and like-minded political parties a better shot of obtaining a two-thirds majority in the upper chamber needed to begin the process of revising Japan's pacifist constitution for the first time since it was forged after WW2.

"What is needed now is political stability," Abe said during a weekend campaign speech, according to Japanese media.

"We cannot lose now. We cannot entrust Japan to the Democratic Party and the Japanese Communist Party (JCP)," he added.

The main opposition Democrats have joined hands with the JCP and two other small parties to try to block Abe and his allies from gaining the two-thirds super majority.

On Monday, Abe instructed his finance minister to take steps if needed to counter the yen's steep rise, which threatens exports and by extension could tip Japan back into recession.

"We need to continue to work toward market stability," he said at an emergency meeting of his government and the Bank of Japan.

Abe's campaign pitch echoed that by Australian Prime Minister Malcolm Turnbull, who on Sunday used Brexit shockwaves to urge voters to return his government with a majority at a July 2 election, arguing only stable government can deliver jobs, growth and tough border controls.

Japan's Democratic Party is countering that the rise in the yen and steep fall in Tokyo share prices signal the end of "Abenomics", which after three years has failed to halt Japan's decades of deflation or generate sustainable growth in an economy plagued by a shrinking, fast-ageing population.

"It must be said that the 'Abenomics' party is over," Democratic Party leader Katsuya Okada said in a statement after the historic Brexit vote.

Analysts said, though, that the opposition argument was unlikely to gain much traction as long as market volatility persisted. Many voters still remember the Democrats' 2009-2012 rule as marred by infighting and policy missteps.

"If anything, Brexit is good for Abe," said Gerry Curtis, professor emeritus at New York's Columbia University. "In times of turmoil, the Japanese voter opts for stability."

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