Measuring success: Shinzo Abe, Japan's prime minister and president of the Liberal Democratic Party, gestures as he speaks during a debate with other party leaders
ahead of the Upper House election. Abe is calling on voters to keep the faith with Abenomics, despite widespread consensus that it has been a dismal flop and has failed to revive the Japanese
economy or improve household welfare | BLOOMBERG Commentary | COUNTERPOINTWhat are Shinzo Abe’s real three arrows?
In his campaign for the upcoming Upper House elections, Prime Minister Shinzo Abe is pussyfooting around his plans to revise the
Constitution. He is keeping his cards close to his chest because polls have shown that voters oppose constitutional change. Instead, Abe is calling on voters to keep the faith with
Abenomics, despite widespread consensus that it has been a dismal flop and has failed to revive the Japanese economy or improve household welfare.The cat is well and truly out of the bag regarding this failure — on June 27, NHK announced that only 6 percent of voters polled think Abenomics is working well while
only 26 percent favor constitutional revisions, and only 11 percent think it a priority. Even two-thirds of newbie voters aged 18-19 know Abenomics is a no-hoper according to a Kyodo poll
taken in June. It gets worse: 70 percent of women voters in this cohort don’t expect much from Abenomics, taking the shine off his “womenomics” grandstanding. The good news for Abe is
that these young voters are only marginally more interested in the elections than other voters, with just 56 percent expressing an intention to vote. So much for an enthusiastic response
from the newly enfranchised!Apparently Abe’s campaign strategy is based on trying to keep the voter-participation rate low, and on that score he has
a good track record, driving it down to just over 50 percent in the last election in 2014. The reason he doesn’t want to upset the applecart of apathy is that low turnout gives the
Liberal Democratic Party an advantage: His core constituencies turn out to vote and will do so again in large numbers now that they smell blood, in the form of the prospects of a
two-thirds majority in both houses and the possibility of constitutional revision. The fact that almost half of all eligible voters don’t vote means that Abe’s LDP has been winning
elections with less than 25 percent of the potential vote.So this explains why Abe is focusing on his discredited Abenomics program, the “three
arrows” of radical monetary easing, fiscal stimulus and structural reforms. Who cares that representatives of leading industrial nations trashed it when they visited for the G-7 summit in
May? They pointed out that the program really involves only one arrow: massive monetary easing. These leaders and virtually every sentient observer know that Abenomics is sputtering and
is focused on monetary policy alone. A June Kyodo poll of all Upper House candidates running in the July 10 elections, including LDP candidates, reveals that 64.7 percent believe that
Abenomics has not delivered, having failed to improve the economy. Business leaders are even more downbeat. If the LDP’s own candidates and most voters are skeptical about
Abenomics, why run a campaign on it?The reason is that Abe needs to deflect attention away from the LDP’s plans to revise the Constitution. But
those plans are hidden in plain sight and deserve more attention because the more the public knows about them, the more they might realize that thumbing their collective noses at the
elections will hand Abe a historic opportunity to achieve his long-standing goal of overturning the postwar order. Voter disinterest is precisely what Abe is praying for so that he can
rid the Constitution of pesky Western values such as civil liberties. He seeks to empower the state vis-a-vis citizens and eliminate the war-renouncing Article 9 that he and his
supporters see as emasculating Japan, keeping the nation subordinate to the U.S.Those who want to revise Article 9 are not all ultra-nationalist
security hawks eager to make Japan the Great Britain of Asia. Many other pro-revision advocates point out the yawning gap between the apparent prohibitions on maintaining armed forces and
the existence of Japan’s well-equipped armed forces — the country now has a larger navy than the U.K. Some argue that this breach discredits the Constitution and that Abe’s
reinterpretation, which would allow for Japan to engage in collective self-defense, further subverts it. So, some argue, if Article 9 is essentially already being ignored and the threat
of conflict in Asia has become more real, why do a majority of Japanese oppose revision?Japanese pacifism draws on the trauma of World War II and
the deep scars it left on the nation — memories that have been passed down through families, displayed at museums, taught at schools, shown in documentaries and commemorated at annual
rites such as those in Okinawa, Hiroshima and Nagasaki. Citizens worry that the “Abe Doctrine” will endanger the country, and that beefing up the alliance with the U.S. may lead Japan
into a war at Washington’s behest, rather than safeguarding the country’s national security.Japan is basically a one-party system, and there is
little reason to believe that the Diet would act as resolutely as the British Parliament did a few years back in scuttling Prime Minister David Cameron’s plan to provide military support
to the U.S. in Syria. Under Abe, the premiership has only grown in power, and his national security council and new secrecy and security legislation have strengthened his hand in a system
where checks and balances are already weak. Japanese citizens are wary of entrusting Abe or any leader with too much discretionary power, but it is a fait accompli that they can do little
about in elections, given the imbalance of power between the LDP and other parties.Hence, Article 9 is seen by many to have residual symbolic power,
manifesting pacifist sentiments as a collective norm. Across Japan, this idealism is also represented by the multitudes of demonstrators who gathered outside the Diet last summer to
denounce Abe’s security legislation. Students Emergency Action for Liberal Democracy (SEALDs) organized popular protests against the secrecy and security legislation and has been involved
in coordinating opposition parties for the Upper House elections. They decry the intensifying crisis in constitutional government and the LDP’s bait-and-switch campaign strategy aimed at
bamboozling voters.If the LDP wins big, Japan Conference (Nippon Kaigi), the nation’s largest and most influential right-wing organization, will
lobby Abe’s Cabinet to deliver on their shared vision. The consonance of interest between Abe and Japan Conference is clear in that a majority of his Cabinet ministers are members. It has
clout in the Diet where 39 percent of all legislators — 281 in total — are members. This will enable it to press ahead with their real goals: constitutional revision, security autonomy
and Emperor worship. These are the three arrows that Abe really cares about.
Jeff Kingston is the director of Asian Studies, Temple University Japan.
Abenomics on the line for Abe in July poll: experts
Critics of Prime Minister Shinzo Abe’s bid to alter Japan’s postwar pacifist Constitution say the fate of the July 10 Upper House
election depends on whether people agree to the revision.Liberals are desperately urging voters to say no to Abe and are calling for the abolition of
controversial security legislation the prime minister forcibly rammed through the Diet last year.But recent polls have suggested that voters have other
priorities: For many, the economy and their everyday lives seem to take precedence.In the latest poll conducted by public broadcaster NHK from Friday
through Sunday, the issue of social security took center stage, with 29 percent of 2,044 respondents saying it was the most important issue when casting their ballot.This was followed by economic policies with 26 percent and issues involving the consumption tax at 12 percent. Only 11 percent of respondents cited constitutional
issues.“In a stump speech, I will first emphasize the economy. I will say that jobs have increased and corporate profits have surged,” said a senior LDP
lawmaker close to Abe earlier this month.The Democratic Party, the largest opposition force, has asked voters to stop Abe’s ruling coalition of the Liberal
Democratic Party and Komeito from occupying more than two-thirds of the 242-seat chamber, a prerequisite to initiating a national referendum on any constitutional revision.But their election strategy is “out of focus” and it will only “benefit us,” the lawmaker said, speaking on condition of anonymity.So
far, the coalition’s campaign appears to be working. According to a prediction published by major news outlets over the weekend, Abe’s ruling coalition is now likely to win more than half of the
121 seats up for grabs, and together with other right-wing minor parities, the pro-revision camp is seen as likely to achieve its two-thirds majority.Despite high levels of interest among voters, however, ruling coalition politicians continue to cite economic indicators in ways that are confusing — if not downright deceptive
— with some facts appearing to contradict each other.
Economists have said that during election campaigns, the ruling coalition, and in particular Abe, has only discussed figures convenient to them, ignoring the
overall picture of the still-sluggish economy after three years of Abenomics policies.“There is a huge gap between the macroeconomy and microeconomy
shown by indicators. That’s a key point of Abenomics,” said Kenji Yumoto, a senior economist and vice chairman of think tank The Japan Research Institute Ltd.“And Prime Minister Abe has only talked about microeconomic ones,” Yumoto said.Abenomics is a set of ultraloose monetary policies led
by the Bank of Japan, aggressive fiscal measures and structural reforms to raise Japan’s growth potential.In their campaigns, Abe and ruling lawmakers
have often emphasized that Abenomics has improved employment and greatly increased corporate profits, which has in turn boosted tax revenues for both local and central governments.Indeed, some economic indicators are favorable. The jobless rate stood at 3.2 percent as of April, the lowest-level in 18 years, and the job-to-applicant ratio
was 1.34, the highest level in more than 24 years.According to the Finance Ministry, the ordinary profits of 7,129 major nonfinancial firms hit a total
of ¥20.29 trillion in the April to June quarter of 2015 — a record high. The January to March quarter of this year saw profits at ¥15 trillion.Higher
corporate profits have also boosted tax revenues for local and central governments. Abe claims these have increased by ¥13 trillion thanks to Abenomics, pledging to use some of the “fruit” of
his economic policies to cover expanding social security budgets and also simulate the economy further to “break away from deflation.”“The
job-to-applicant ratio has exceeded 1 in all of the 47 prefectures. This is a first in the postwar years, and something that was not achieved even in the period of rapid economic growth (of
the 1950s and ’60s) nor in the bubble economy” of the late 1980s, Abe said during a TV debate aired Friday.However, economists warn the reality of
Japan’s macroeconomy is not as rosy as Abe would have people believe. Overall economic performance remains sluggish, they say.Japan saw real economic
growth, or nominal economic growth adjusted for inflation or deflation, of only 0.8 percent last year, one of the lowest levels among major developed countries.On average, Japan’s economy grew only 0.6 percent a year over the past three years of Abenomics, Yumoto of The Japan Research Institute pointed out. Meanwhile, consumer
spending, which accounts for about 60 percent of the economy, fell in 2014 and 2015, according to gross domestic product figures released by the Cabinet Office. It is the first fall for two
consecutive years recorded in the postwar period.Bank of Japan Gov. Haruhiko Kuroda confidently vowed three years ago to bust deflation by stimulating a
2 percent inflation in just two years.But despite the BOJ’s ultraloose monetary policy and its purchase of massive amounts of Japanese government bonds,
the core consumer price index, which does not include prices in fresh foods, grew only 0.5 percent last year due to a lack of demand for funds in the real economy.The core CPI even fell in March and April this year by 0.3 percent, respectively, compared with the same month a year ago. This has left Kuroda, who has already pushed back
the target time for taming inflation to the end of fiscal 2017, with few options.Yukio Noguchi, an economist and adviser at Waseda University’s
Institute of Financial Studies, argued that almost all of the “achievements” Abe has boasted of can be attributed to the yen’s depreciation.“Abenomics
hasn’t increased output or wages,” Noguchi said, explaining that the prime minister’s economic policy has failed to stimulate the economy.“The yen’s
depreciation boosted corporate profits of export-driven companies and it increased government tax revenues. That’s all that happened,” Noguchi said.It
is widely believed that the BOJ’s aggressive monetary easing at least helped pushed down the yen’s value and aided major export-reliant companies.But
Noguchi argued that the BOJ’s easing merely triggered speculation among currency traders. The real cause of the yen’s depreciation, Noguchi said, was the eurozone financial crisis.Indeed, the yen began falling against other major currencies as the eurozone was facing crisis in the fall of 2012, far before Abe took the power in December
2012 and Kuroda took up his post in March the following year.
Now the BOJ’s monetary tools appear almost powerless as external factors abound.The yen, which began surging against the
dollar earlier this year because of apparent reluctance by the U.S. Federal Reserve to further boost interest rates there, is again rising after Britain’s decision to leave the European
Union. This has seen the currency value shoot up to around the ¥100 level against the dollar.Throughout these storms, the BOJ has maintained its
ultraloose monetary measures, a fact that has underlined the limit of the BOJ’s influence as well as that of Abenomics.“Now that the yen’s value has
risen, everything that happened so far will be reversed,” Noguchi said. “It means corporate profits will decrease, stock prices will fall and government tax revenues will dwindle.”Katsuya Okada, president of the Democratic Party, has taken a similar view of the government’s economic policies.“Now the
Abenomics party is over,” Okada told reporters Friday, shortly after the British referendum result.Abenomics heavily relied on the BOJ’s monetary easing
and government fiscal spending, which will only have temporary effects in boosting the economy, Okada said.“No fundamental problems (with the Japanese
economy) have been dealt with, and trends in the currency and stock markets will be reversed. Britain’s exit from the EU will only accelerate it,” Okada said.According to Noguchi, a recent fall in the unemployment rate and a rise in the job-to-applicant ratio, have also been worrying signs for the Japanese economy in the longer
term.Given the rapidly aging society and fewer children being born, Japan is likely to face a severe shortage of workers that will limit the nation’s
economic growth potential, Noguchi said, echoing the opinions of numerous other economists.Another limiting factor has been the increase of lower-paying
jobs, such as those at nursing services for the elderly and nonregular, temporary staff and contract workers, Noguchi noted. He said he was also concerned over the eventual consequences of
Abenomics, which could stoke an economic “catastrophe.”The BOJ’s introduction of its negative interest-rate policy has pushed down the yield on
benchmark JGBs to below zero percent, which has made the JGBs less attractive to banks since holding them until maturity incurs losses, Noguchi said.Indeed on June 13, Bank of Tokyo-Mitsubishi UFJ Ltd., one of Japan’s three largest mega-banks, told the Finance Ministry that it would relinquish its status of a “primary
dealer” of the JGBs, apparently fearing possible losses.
“This means the BOJ’s monetary easing, which buys massive amounts of JGBs from banks, will soon reach its limit,” Noguchi said.If many banks begin shying away from buying JGBs, it could push up interest rates, dramatically increase debt-serving costs of the government and eventually lead to a
fiscal crisis, Noguchi warned.
Latest poll shows former minister Koike leading in Tokyo governor election race
Kyodo
Former Defense Minister Yuriko Koike is taking the upper hand in the race for Tokyo governor, followed by former internal affairs minister Hiroya Masuda and veteran
journalist Shuntaro Torigoe, a Kyodo News survey showed Sunday.
Tourism jumps 28 percent in first half as boom continues
Kyodo
Nagasaki’s Oura Church among Christian sites eyed for UNESCO Heritage listing
Kyodo
A government panel on Monday selected Christian sites in the southwest, including a church in the city of Nagasaki known as Japan’s oldest, as a collective
candidate for UNESCO World Cultural Heritage status in 2018.
Eiken broadens language tests to address criticisms
After investors pushed up Nintendo Co. shares with a fervor only matched by gamers chasing Pikachu, traders are now locking horns over
how much the high-flying stock is worth.
Monster anticipation as ‘Pokemon Go’ launches in Japan
Japanese tourist sites on alert following ‘Pokemon Go’ launch
Kyodo
Following Friday’s launch of the “Pokemon Go” game in Japan, managers of tourist sites and summer festivals nationwide expressed concerns about distracted players
chasing down the virtual monsters that the game places on their smartphone screens.
‘Pokemon Go’ craze leads to spate of accidents, traffic offenses across Japan
Kyodo
Searching for Pikachu
Police say accident in Tokushima is Japan’s first ‘Pokemon Go’-related death
Kyodo, Staff Report
Knife attack leaves 19 dead, 25 hurt at Kanagawa care facility
Kyodo,
Staff Report
Care home massacre probed as mercy
killing
Kyodo
Despite obvious signs, care home killer slipped through the cracks
Kyodo,
Staff Report
Uematsu cited Hitler’s ideology, menaced care home for months before attacking residents
