Behind the Scenes of Tokyo's Political Soap Opera
Comment of the Day

November 11 2013

Commentary by David Fuller

Behind the Scenes of Tokyo's Political Soap Opera

Here is the opening from this interesting column by William Pesek, published by Bloomberg
Shinzo Abe faces plenty of roadblocks in his quest to revive Japan's sluggish economy. His mentor wasn't supposed to be one of them.

Former Prime Minister Junichiro Koizumi is easily the most popular Japanese politician of the last 20 years. Not since Yasuhiro Nakasone in the mid-1980s had a Japanese leader made such a splash domestically and globally. Not coincidentally, both were keen reformers -- as Abe, too, claims to be.

After he left office in 2006, the now-71-year-old Koizumi seemed happy to stay in the shadows. That changed last month, when he made a very public about-face from his previous support of Japan's nuclear industry. "Nothing is as costly as nuclear power generation," Koizumi said in an Oct. 1 speech, arguing that Japan "could do well without" the dangerous reactors on its seismically active shores.

Since then, Koizumi has made a series of televised comments about the crisis at Fukushima, the dangers of atomic waste, the desirability of Japan (TPX) hawking nuclear hardware overseas, and the urgent need for green alternatives. His campaign is landing a major blow to Abe's revival plan. "Abenomics" claims to be firing three arrows -- monetary and fiscal stimulus, plus deregulation -- but there's a nonadmitted fourth: cheaper energy. The anti-nuclear movement Abe sought to contain now has a bona fide political rock star on its side.

David Fuller's view I do not doubt that Junichiro Koizumi's comments on nuclear power will resonate with many Japanese citizens. That is why I was surprised when Taku Yamamoto, Chair of the LDP's Energy Committee announced this new, central plan to reopen and run Japan's nuclear reactors, which I discussed on 23rd October. I also said I would welcome informed views on this subject and received this informative email from a Japanese subscriber two days later.

Meanwhile, my technical assessment of Japan on 23rd October still applies and USD/JPY looks more likely to move upwards from current levels over the medium term.

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