Voters turnout for Japan’s Sunday elections were a new post-war low: nearly half the country’s voters didn’t take part. Despite Japanese Prime Minister Shinzo Abe’s renewed mandate of his economic policies, Japanese stocks fell on the first day after the elections. CCTV’s Mike Firn reported from Tokyo.
Stocks fall on first trading day since Japan electionsVoters turnout for Japan's Sunday elections came in at a new post-war low. Nearly half the country's voters didn't take part. Despite Abe's renewed mandate of his economic policies, Japanese stocks fell on the first day after the elections. CCTV’s Mike Firn reported from Tokyo.
It may not be the massive show of support for ‘Abenomics’ the prime minister was hoping for, but with more than two-thirds of the seats in the lower house the government now had the power to push through its economic policies.
“This election result will recharge Prime Minister Abe’s political capital, which looked like [it was] heading south when scandals hit the cabinet in the fall,” foreign exchange strategist Shusuke Yamada said.
“It means Abe’s grip on power is good for another two years but [there is a] new urgency, a new sense of action now,” Jesper Koll, director of Japan Equity Research, said. “That’s unlikely to be forthcoming. Steady as she goes is the message.”
With the election over Abe could focus on unfinished business, like preparing a supplementary budget to revive the economy. He may also cut corporate tax to help raise profits and persuade companies to increase wages.
“The big story in 2015 Japan is going to be corporate earnings, corporate profitability,” Koll said. “You’ve got a steady government that is providing steady monetary and fiscal stimulus. The key message for investors is, corporate earnings can grow much further because corporate Japan is at the beginning of massive productivity boom.”
Yamada said the yen may fall as low as 130 to the dollar by the end of next year or by early 2016, followed by a strengthening to around 123 per U.S. dollar over the next 12 months.
For more, CCTV America interviewed Jesper Koll, director of Japan equity research.