Sunday’s election: A test for Abenomics 2.0?

Hiwatashi, Yamaguchi, LDP, NKP, Japan, elections, abenomics, test

9 Jan 2015

The politics that investors seem most interested in is the Greek election on January 25, three days after the ECB meeting.  However, there is another election that is receiving practically no attention, but could be very revealing. The prefecture of Saga in Japan holds an election Sunday that could give insight into how much Prime Minister Abe is going to be able to enact his reforms.

Remember that even before last December's election, the LDP and its junior coalition partner enjoyed a super-majority in the Diet.  Yet reforms, the third arrow of Abenomics, have been mostly disappointing.  The main obstacle is not the opposition.  It ran a poor campaign and did not offer much of a substantive alternative to Abenomics.