The December 16 election to the Diet’s lower chamber, the House of Representatives, has not only resulted in a decisive victory for Shinzo Abe’s Liberal Democratic Party (LDP) but has also reopened several questions for Japan and the region. Although the LDP, with 294 seats, won an absolute majority, Mr. Abe plans to form a coalition with the smaller New Komeito Party. The outcome is a thumping defeat for the Democratic Party of Japan (DPJ), which had won 308 seats in August 2009, ending an LDP monopoly which had lasted all but 11 months of the previous 53 years. This time the DPJ won a mere 57 seats; struggling with an opposition majority in the upper house, the House of Councillors, it had lasted only three years of its four-year term. Mr. Abe’s immediate domestic task will be to revive an economy which has stagnated for years. Secondly, Japan’s exports have fallen in response to a strong yen, and the country has slipped to third place behind China among the world’s biggest economies. The incoming Prime Minister has proposed weakening the yen to stimulate exports. Though the money markets are nervous of direct central government action towards that end, Mr. Abe’s statements themselves may have helped cause the yen to slide by 6 per cent between early November and the election date. The LDP’s tendency towards high spending on public works will, however, be closely watched.
Internationally, Mr. Abe’s victory has had a mixed response. China, Japan’s biggest trading partner, has reacted angrily to his tough talk on the uninhabited but disputed Senkaku-Diaoyu islands in the East China Sea. Even before the election, Japan had started to abandon its post-war pacifism, holding joint naval exercises in Pacific and Asian waters and sending the Japan Self-Defense Forces to run a $2 million disaster training scheme for Cambodia and East Timor respectively. The LDP leader has also suggested constitutional amendments to give the military a bigger role, and he will probably reverse the previous government’s post-Fukushima decision to move away from nuclear power generation. For India, Mr. Abe’s election is likely to create a more favourable environment for civilian nuclear cooperation. Even as it prepares for a tighter embrace with a valued partner, New Delhi needs to guard against any renewed attempt by the Japanese side to overlay the bilateral relationship with strategic initiatives that might polarise Asia. At a time when Washington’s ‘Asia pivot’ has set the stage for accentuated power rivalry, the last thing the region needs is a revival of Mr. Abe’s earlier proposals for a ‘Quadrilateral’ linking Japan, the U.S., Australia and India.