May 3, 2019

PM Abe enjoys new-era bump to his approval rate.

In April 2019, Japan's Prime Minister of (PM) Abe enjoyed a sizable bump in his approval rate. His approval rate was 49.2% in April, up from 44.9% in March. His approval rate has been improving since the recent low of 35.3% in April 2018. His disapproval rate was 32.9% in April 2019. Media poll reports tend to point to the ascension of the new Emperor as the reason for the boost in the public's assessment of PM Abe's performance. Supposedly, the excitement surrounding the ascension and the official change in the name of the era contributed to the positive perception for PM Abe.

In our view, it will be interesting to see if the ascension indeed boosted consumer sentiment in Japan. PM Abe did enjoy more media appearance in April and probably succeeded in associating himself with a notion of an important change in society. Japan's consumer sentiment has been consistently deteriorating for the past 15 months. The next release for April will be published on May 9.

In addition to the imperial ascension, we would point to the fading of negative news centered around the falsification of wage statistics. Toward the end of 2018, the Japanese government reported that there was an important error in the way wage statistics were compiled. In our view, the error was more due to the lack of understanding in statistical procedure within the agency responsible for the statistics, rather than a politically motivated manipulation. However, as the error resulted in a higher than otherwise wage inflation, and the revelation impressed upon the public that PM Abe failed to raise wage inflation, the news was damaging to the Japanese government. The news seems to have faded by now to the benefit of PM Abe.

Throughout his reign, PM Abe repeated demonstrated his political resilience. The cronyism scandal in 2016 in which the government awarded a special license to open a veterinary school to PM Abe's long-time friend seemed fatal for PM Abe in many analysts' view, including us. However, toward the end of 2018, PM Abe's popularity recovered to mid-40s and no political pundits are talking about his near-term demise. PM Abe is term-limited as the head of his party and his current term expires in September 2021, but we hear a chatter that it is not unthinkable that his party allow him to continue.

The key political event to watch in 2019 would be the Upper House election in July 2019. The ruling coalition will be hard-pressed to maintain the current comfortable majority of 62%, but it is likely to maintain a simple majority after the election.