March 12, 2018 14:30 JST

Policy implications from the document tampering scandal

Summary

After the landslide electoral victory in 2017, it looked certain that Prime Minister Abe would stay on for a few more years. A new development in a year-old cronyism scandal raises a possibility that he may not survive 2018 as Japan's Prime Minister. A leadership election for his ruling party, LDP, is scheduled this September and there is a chance he would be persuaded not to run. Mr. Abe may stay on as a kingmaker, but a fresh face at the top seat of the government will likely bring substantial changes to the policy mix in Japan. In our view, the changes are likely to take the direction toward fiscal consolidation and more conservative monetary policies.

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