Japan’s Abe calls for ‘snap’ elections
November 18, 2014, 3:54 pm

Shinzo Abe has supported the yen’s fall as a means to reinvigorate the economy [Xinhua]

Parliament’s lower house is expected to be dissolved on November 21, paving the way for elections in mid-December.

Despite his falling popularity numbers (just below 50 per cent), Abe is expected to win the election.

But political analysts say that Abe’s problems began in earnest last April when he pushed through the first of a series of raised value-added (sales) taxes.

The raise of taxes to 8 per cent in April was designed to boost income and stimulate the market (starting with weakening the yen currency to encourage exports) in the wake of dismal economic prospects at the end of 2013.

But the purposeful devaluation of the Japanese Yen had an almost adverse effect. The export market rose only by 0.5 per cent, while imports jumped up by 3.4 per cent, mainly due to a slow growth in other Asian markets.

During January-June in 2013, imports grew by 9. 2 per cent on year to 38,801.2 billion yen ($389.147 billion) while exports rose 4.2 per cent to 33,957.4 billion yen ($340.5 billion) – a trade deficit of 4.8 trillion yen ($48 billion).

Economists say some of the deficit is due to the 2011 Fukushima nuclear crisis which forced the country to turn from nuclear power to more expensive fossil-fuel alternatives; some 90 per cent of Japan’s energy supplies come from imports.

Japan’s debt surged into record figures toward the end of 2013, totaling up to at least double the nation’s total GDP in 2012, according to the Finance Ministry.

Shinzo’s announcement on Tuesday also appeared to indicate that the Prime Minister would delay the second round of raised sales tax beyond the initial October 2015 start date.

Japanese media has also been speculating that the Prime Minister is seeking a mandate to bring the country’s controversial nuclear plants back online.

Source: Agencies