Shooting at Abe speech

Former Japanese Prime Minister Shinzo Abe has been rushed to hospital after falling to the ground after being shot during a speech in Nara, Japan, On July 8, local time. The suspect has been arrested by police.

The Nikkei 225 index fell quickly after the shooting, giving up most of the day’s gains; Nikkei futures also pared gains in Osaka; The yen traded higher against the dollar in the short term.

Mr. Abe has served as Prime minister twice, from 2006 to 2007 and from 2012 to 2020. As Japan’s longest-serving post-World War II prime minister, Mr Abe’s most iconic political message was the “three arrows” policy he introduced after taking office for the second time in 2012. The “first arrow” is quantitative easing to combat long-term deflation; The “second arrow” is an active and expansionary fiscal policy, increasing government spending and making large-scale public investment. The “third arrow” is the mobilization of private investment aimed at structural reform.

But Abenomics has not worked as well as expected. Deflation has eased in Japan under QE but, like the Fed and the European Central Bank, the boj has failed to hit and maintain its 2 per cent inflation target, while negative interest rates have hit bank profits hard. Increased government spending did spur growth and reduce unemployment, but it also left Japan with the highest debt-to-GDP ratio in the world.

Despite the shooting, the Ministry of Internal affairs and Communications announced that the upper house elections scheduled for October 10 would not be postponed or rescheduled.

Markets and the Japanese public may not have shown much interest in the upper house election, but the attack on Abe raises the potential uncertainty of the election. Experts said the surprise could have an impact on the LDP’s final tally as the election nears, with a surge in sympathy votes expected. In the longer term, it will have a profound effect on the LDP’s internal struggle for power.

Japan has one of the lowest gun rates in the world, making the broad daylight shooting of a politician all the more shocking.

Abe is the longest-serving prime minister in Japanese history, and his “Abenomics” has pulled Japan out of the mire of negative growth and enjoyed huge popularity among the Japanese people. Nearly two years after stepping down as prime minister, he remains a powerful and active figure in Japanese politics. Many observers believe that Abe is likely to seek a third term as his health recovers. But now, with two shots fired, that speculation has come to an abrupt end.

Analysts say it could spur more sympathy votes for the LDP at a time when the upper house election is taking place, and it will be interesting to see how the LDP’s internal dynamics evolve and whether the rightwing will strengthen further.

Post time: Jul-13-2022