Japan PM’s latest crisis may be the wake-up call he needs

published 21 July 2017

854-Abe-634 — Shinzo Abe is facing a fresh scandal

In a "remarkable volte-face", Japan's prime minister Shinzo Abe has agreed to be questioned in the Diet over a cronyism scandal involving the government's decision to award a contract to build a veterinary school to one of his close friends, says Walter Sim in The Straits Times. Abe's change of heart comes amid growing public mistrust towards him and his Liberal Democratic Party (LDP), says Robin Harding in the Financial Times.

In the past few months a "stream of scandals and unpopular laws", combined with "slow progress" on his promised economic reforms, have seen his popularity ratings drop to a record low, halving to around 33% in a matter of months. The latest scandal is Abe's biggest crisis since he took office in 2012, says Sim, and follows a "rout" of his party in the Tokyo elections this month, when the LDP won just 23 of 127 seats, down from 57. Abe has since vowed to make "every effort" to regain public trust (though the public are not convinced), and he is planning a cabinet reshuffle in August.

The weakening of his position has led to a "resurgence of factional manoeuvring" within the LDP, says Harding. Foreign minister Fumio Kishida, widely seen as Abe's likely successor, has voiced doubts about his leadership. Abe's second three-year term runs out in autumn 2018 and a general election must be held by December 2018 at the latest. Some doubt Abe will survive that long, but given the weakness of the opposition and his "strong parliamentary majority", he may be "able to ride out a period of unpopularity".

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

What is bad news for Abe "could be good news for Japan if it forces him to refocus his attention on the economy", says The Wall Street Journal. If he were to reform Japan's labour laws instead of pursuing an "unpopular" constitutional revision, it would give an "immediate boost to business confidence". One of the reasons companies aren't raising wages, despite low unemployment, is that their payrolls are swollen due to strict rules on lay-offs. "Allowing companies to hire and fire more freely would be initially unpopular, but it would deliver the economic payoff that Abe needs to salvage his premiership".

Emily has worked as a journalist for more than thirty years and was formerly Assistant Editor of MoneyWeek, which she helped launch in 2000. Prior to this, she was Deputy Features Editor of The Times and a Commissioning Editor for The Independent on Sunday and The Daily Telegraph. She has written for most of the national newspapers including The Times, the Daily and Sunday Telegraph, The Evening Standard and The Daily Mail, She interviewed celebrities weekly for The Sunday Telegraph and wrote a regular column for The Evening Standard. As Political Editor of MoneyWeek, Emily has covered subjects from Brexit to the Gaza war.

Aside from her writing, Emily trained as Nutritional Therapist following her son's diagnosis with Type 1 diabetes in 2011 and now works as a practitioner for Nature Doc, offering one-to-one consultations and running workshops in Oxfordshire.