Japan’s Prime Minister, Junichiro Koizumi has “won an overwhelming election victory”, said The Times. The win represents the first time the Liberal Democratic Party has had an “outright majority” since 1990, and is “a vindication” of Koizumi’s decision to call a snap election after his proposals to privatise Japan’s postal service, Japan Post, were rejected.
His next move will be to resubmit the postal Bills. With the upper chamber remaining unchanged – only seats in the lower house were up for election – it could try to block the Bills again. However, “signs are that opposition will crumble under the weight of the Prime Minister’s popular mandate”.
Indeed, the scale of the win “may enable Koizumi to push for a more thorough breakup of Japan Post” than the earlier bill would have achieved, said Bloomberg. Tokyo’s Nikkei 225 index surged to its highest level since June 2001 as the size of the victory became clear. The index closed 204 points higher at 12,896.
Shares in financial firms were the main gainers as those most likely to benefit “if deposits and insurance contracts” held by individuals through Japan Post were shifted into “banking or securities accounts”. Among the top risers was Mizuho Financial Group, the country’s biggest bank, climbing as much as 4% at one point.
Koizumi “played a very clever game by kicking out the anti-reformers” in his party, said economics professor Haruo Shimada on Bloomberg. “Foreign investors have good reason to see him as a symbol for change.”
The LPD plans to complete the sale of Japan Post by next March. But what then for Koizumi? He has insisted that he will “keep his promise to step down next September” when his term as LPD leader ends, said The Times. But that would give him little time “to tackle Japan’s most pressing domestic problem” – reform of the underfunded welfare and pensions system. “Many Japanese” may decide that the “best way forward is to retain…their maverick, bold and victorious Prime Minister.