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Analysis: Japan's New 'Old Guard'

Council on Foreign Relations

September 24, 2007
Author: Lee Hudson Teslik

Nearly two weeks of speculation ended September 23 as Japan’s Liberal Democratic Party (LDP) elected Yasuo Fukuda, a moderate party elder, as the country’s next prime minister. Commanding a decisive 63 percent of the vote (Yomiuri), Fukuda will replace Shinzo Abe, the embattled Japanese prime minister who resigned recently in the face of scandal, public unpopularity, and health problems. On the primary international question facing Japan—the continuation of Japanese support for the war in Afghanistan—Fukuda may keep much the same tack as Abe, who supported involvement. CFR’s Sheila Smith, in a new interview, says Fukuda will soon present a bill aimed at extending the law that allows Japan to support international war ships in the Indian Ocean.

Fukuda’s accession raises as many questions as it answers. For all Japan’s discontent with Abe, his rapid fall from grace could pose serious problems for the country, particularly if Fukuda’s rise curtails an ambitious economic program launched by Abe and his predecessor, Junichiro Koizumi. The two LDP reformists set forth a series of economic goals including deregulation of government-owned industries and passage of free-trade agreements, as Abe described to the Washington Post earlier this year. Some analysts went so far as to predict that the measures would finally lift the Japanese economy from years of crippling deflation.

Abe’s fall spooked the bulls. In late July, when the LDP met sweeping losses in upper-house elections, Japanese investors faced “paralysis” amid worries reforms would wither (Bloomberg).

Read the rest of this article on the cfr.org website.

Copyright 2007 by the Council on Foreign Relations. This material is republished on GlobalSecurity.org with specific permission from the cfr.org. Reprint and republication queries for this article should be directed to cfr.org.