U.S. markets close in 2 hours 2 minutes
  • S&P 500

    -30.78 (-0.71%)
  • Dow 30

    -168.14 (-0.49%)
  • Nasdaq

    -165.96 (-1.27%)
  • Russell 2000

    -32.04 (-1.59%)
  • Crude Oil

    +1.52 (+1.76%)
  • Gold

    -14.10 (-0.79%)
  • Silver

    -0.35 (-1.74%)

    0.0000 (-0.00%)
  • 10-Yr Bond

    +0.0840 (+2.97%)

    -0.0047 (-0.39%)

    +1.2130 (+0.90%)

    -416.69 (-1.75%)
  • CMC Crypto 200

    -15.48 (-2.70%)
  • FTSE 100

    -20.31 (-0.27%)
  • Nikkei 225

    +353.86 (+1.23%)

Japan Ruling Bloc Wins Big in Vote Held Days After Abe’s Murder

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- Japan’s ruling coalition expanded its majority in an upper house election held Sunday, two days after the assassination of former Prime Minister Shinzo Abe, who led the bloc to numerous victories during his term as premier.

Most Read from Bloomberg

The results will likely bolster current Prime Minister Fumio Kishida, who had been seeking a solid victory that could strengthen his grip over the long-ruling Liberal Democratic Party and open the way for a “golden three years” in which he need not face another national election. He said his top priority after the vote would be reviving the economy.

The LDP and its junior coalition partner Komeito won 76 seats, results from national public broadcaster NHK showed early Monday. This was well above the 56 seats they needed to retain their majority and the 69 seats they needed to increase their size in the body.

Sympathy votes following Abe’s death seem to have swung the balance in some constituencies, according to Shigenobu Tamura, a former LDP staffer turned political commentator. But that didn’t lead to a major surge for the ruling bloc, which had been projected by the Yomiuri newspaper before the killing to take between 65-80 seats.

Japanese stocks climbed on Monday, with the Topix Index gaining as much as 1.6%, in line with gains after each of the past three upper house elections where the ruling coalition retained a majority.

“While the impact on Japanese equities is expected to be limited, there is an increasing likelihood of a steady progress in policies, which will be a supportive factor for Japanese stocks,” Ryota Sakagami, an equity strategist for Citigroup Global Markets Japan, said after the vote.

Half the seats in the less powerful upper house are contested every three years, with an extra vacant seat also up for grabs this time, for a total of 125 out of the 248-strong chamber.

A record 35 women were elected this time, according to the Tokyo Shimbun newspaper, compared with 28 in the last upper house election.

“From the point of view of the Japanese economy, it is a very good thing for the LDP to win and gain a stable three years,” said Takashi Hiroki, executive officer at Monex Inc. “The markets were worried about the Kishida administration at first, but he is now taking a business perspective and monetary policy is also on the right track.”

Following the election, Kishida will face a raft of challenges, including finding ways to revive the lackluster economy and tackle inflation, as Covid-19 infections start to rise again. The premier is looking to reshuffle his cabinet in either August or September, the Nikkei newspaper reported.

“The government will prepare focused policies to deal with the characteristics of Japanese price rises, which are energy and food inflation,” Kishida told Fuji TV after polls closed. “At the same time, we will raise wages. It’s important that these two things are a set.” He later said he wasn’t planning to reimpose Covid restrictions at this point.

Kishida needs to pick a successor to Bank of Japan Governor Haruhiko Kuroda, who has steered the country’s ultra-easy monetary policy. Kishida also faces a tricky debate over his pledge to radically upgrade Japan’s military and push through a commensurate increase in spending.

The main opposition Constitutional Democratic Party won 17 seats -- a drop from the 23 it held before the vote, according to NHK. The right-wing opposition Japan Innovation Party won 12, compared with six previously, it said.

When Kishida entered the election room at LDP headquarters, the premier and members of his ruling party had a moment of silence for Abe, and there was little jubilation as the results emerged. Japan’s longest-serving premier and a figure of enduring influence, Abe died after being shot at a campaign event Friday.

Ex-Japan Leader Abe Killed in Shooting That Shocks Nation

With more than two-thirds of upper house seats were taken by lawmakers in favor of changing Japan’s pacifist constitution, discussion is likely to heat up. Kishida’s former boss Abe was one of the most outspoken proponents of a stronger military and of revising the pacifist constitution to add an explicit reference to Japan’s Self-Defense Forces. The idea of changing the document, which has been unchanged for more than seven decades, remains divisive among voters.

(Updates with market reaction in fifth paragraph.)

Most Read from Bloomberg Businessweek

©2022 Bloomberg L.P.