GR Japan: Post-election analysis
Abe’s administration to keep focus on economic policy
The tailwind for the LDP and New Komeito coalition lasted all the way to election day and gave a resounding victory to the coalition partners, just in line with what GR Japan analysts projected last week - we were one off target, with the coalition getting 135 seats in the House of Councillors, instead of our prediction of 136.
The victory does not alter our analysis in any fundamental way - the Abe administration's focus will be on economic policy and the second round of the "third arrow" of Abenomics - deregulation and supply-side reforms.
Policy competition is now likely to be seen wihin the LDP rather than between different political parties - in a sense a return to the (in)famous 1.5 party system. Different this time, however, is that the mandate received is "reform, reform, reform". And unlike in the bad old times, a quick verdict is to be expected if the LDP fails to deliver on that promise.
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