Key Takeaways

The former Chief Cabinet Secretary Yoshihide Suga officially took over from Shinzo Abe as Japan’s new prime minister on 16 September after securing a resounding victory in the ruling Liberal Democratic Party’s (LDP) leadership contest two days earlier.

The re-appointment of senior officials from the previous administration, such as Finance Minister Taro Aso and Foreign Minister Toshimitsu Motegi, into Suga’s new cabinet indicates that the new PM will largely continue his predecessor Shinzo Abe’s ultra-easy monetary policy and flexible fiscal stance. Moreover, the appointment of LDP ‘heavy hitters’ into key cabinet positions relating to domestic and foreign affairs should further lower the risk of policy instability in the coming months.

Despite short-term policy continuity, uncertainties over whether or when Suga will dissolve Japan’s lower house and call a snap election represent an underlying risk of political instability for the longer term.

Strong in-party support, coupled with growing approval ratings, increases the likelihood of Suga calling a snap election within the next few months, as the new PM could seek a strong mandate and a longer term in order to push through some of his more ambitious policies.

The alternative of just serving out the remainder of Abe’s tenure could hinder Suga’s chance to retain the premiership beyond the scheduled general election in October 2021. Such a scenario could also see stronger challenges from opposition parties to the ruling LDP, increasing the risk of Japan returning to the days of “revolving door” premiership.

Context and Background

Yoshihide Suga was elected Japan’s next prime minister in a parliamentary vote on 16 September. The appointment followed the ex-chief cabinet secretary’s convincing victory in the LDP leadership race, winning 377 out of 534 votes. The change of leadership in the ruling party and the Japanese government was triggered by Shinzo Abe’s abrupt resignation, citing ill health.

Suga’s appointment will ensure domestic and foreign policy stability for at least the coming year

Suga, Shinzo Abe’s long-term lieutenant, was the favourite candidate for many Japanese businesses and investors, who hoped for an extension of Abe’s economic, fiscal, and reform policies under a Suga government. Moreover, the convincing margin of Suga’s victory in the LDP presidential vote suggests that senior members and lawmakers of the ruling party were also in favour of policy continuity.

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