Shinzo Abe’s LDP party swept to victory in yesterdays elections, returning the party to power after three years.
The LDP won a landslide after capturing 294 seats in the 480-member lower house of parliament whilst the Democratic Party of Japan lost three quarters of its representatives. Shinzo Abe is now set to replace current Prime Minister Yoshihiko Noda.
As the news broke the Japanese Yen plummeted to a 20-month low against the US Dollar as traders and investors expect Abe to rapidly expand monetary and fiscal stimulus in a bid to defeat deflation and forced down the value of the Japanese currency. He will be Japan’s seventh leader in six years, inheriting a country in recession, still reeling from the 2011 earthquake and nuclear disaster, and embroiled in a diplomatic dispute with China. He also faces the challenge of winning an upper house election in seven months time.
After his victory Abe spoke to the press saying; “Japan is currently in a crisis in terms of the economy, diplomacy, education and recovery from the catastrophe in the northeast, the job we have been given is to break out of this crisis.”
Abe now faces the challenge of restoring confidence to the country’s manufacturers, dealing with an ever aggressive China and pulling Japan out of recession.
“Abe’s popularity will disappear very quickly if he does something wishy-washy or overreacts and leads Japan into a real crisis with China,” said Aiji Tanaka, a political science professor at Waseda University in Tokyo. “If he is calm and handles the situation well, he can keep up the momentum until July. The DPJ is now a medium-sized party. They performed very badly and disappointed almost everyone in Japan.”
The Pound to Euro exchange rate is currently trading at 1.2301
The Pound to US Dollar exchange rate is currently trading at 1.6188
The Pound to Australian Dollar exchange rate is currently trading at 1.5361
The Euro to US Dollar exchange rate is currently trading at 1.3156
The Euro to Pound exchange rate is currently trading at 0.8126
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