Japan’s opposition forces appeared set to consolidate around Tokyo Governor Yuriko Koike, whose new political group narrowed a gap in opinion polls with Prime Minister Shinzo Abe’s ruling party weeks ahead of a general election.
Abe dissolved parliament on Thursday for an election expected on Oct. 22. The Democratic Party, which has been one of Japan’s top political groups for the past two decades, may decide later in the day whether to merge with the party Koike launched this week, Kyodo news and other domestic media reported.
“We cannot entrust the safety of Japan and the future of our children to a party that changes its banner just for the sake of an election,” Abe told party members in comments broadcast by NHK.
In a survey conducted by the Mainichi newspaper Sept. 26-27, 18 percent of respondents said they would vote for Koike’s Party of Hope in the proportional representation section of the election, placing it second behind Abe’s ruling Liberal Democratic Party on 29 percent. A poll published in the Nikkei newspaper on Monday saw Abe’s party leading both Koike’s group and the Democrats by a five-to-one margin.
“The LDP is vulnerable as the Tokyo governor takes her policies nationwide to form a strong opposition,” Amir Anvarzadeh, head of Japanese equity sales at BGC Partners Inc. in Singapore, said in a note to clients. He added that Abe could even be facing a similar fate to that of UK Prime Minister Theresa May, who lost her parliamentary majority in a snap election in June.
Abe is looking to capitalize on a boost in his approval ratings after North Korea fired missiles over Japan, which diverted attention from cronyism scandals that had dented his popularity. Koike’s rise threatens to make the vote much closer than previously thought, potentially strengthening calls for his replacement in a ruling-party leadership contest next year even if the LDP wins the election.
Financial markets have shown little sign of concern about any political shift in Japan. The Topix index of Japanese shares is close to the two-year high hit Monday amid optimism that the Abenomics program that has brought massive injections of liquidity along with investor-friendly corporate governance reforms, will continue for another four years.
Abe has been in power since 2012, and could become the longest-serving prime minister in Japanese history if he wins the general election and the party leadership vote next year. The LDP has ruled Japan for all but a handful of years since the 1950s.
Abe said Monday that he wanted to test public opinion on his plan to divert some revenue from an upcoming sales tax hike to reduce education costs for working families, putting off a target for improving the fiscal balance. He said he would remain in office if his ruling coalition achieves a simple majority of the 465 seats up for grabs.
Koike is a former newscaster who later joined Abe’s party, serving stints as environment and defense minister. In 2008 she ran unsuccessfully for leadership of the LDP, which would’ve made her prime minister.
She has fought her party’s establishment since it declined to back her in the governor’s race last year, which she won. Afterward she officially left the LDP and formed a new party — Tokyo Residents First — that crushed Abe’s party in Tokyo’s assembly elections in July.
Koike’s new national party wants to delay the sales tax hike because of economic risks, and will also aim to phase out nuclear power — a source of widespread unease in Japan since the 2011 Fukushima disaster. By contrast, Abe’s LDP plans to restart nuclear reactors, aiming to have atomic power make up as much as 22 percent of the nation’s electricity supply mix by 2030.
Shares in Kansai Electric Power Co, the Japanese utility most dependent on nuclear power before the disaster, tumbled the most in eight months on Thursday as Koike’s party gained steam. A big win for her could impact the nation’s nuclear regulator and restarting reactors, according to Tom O’Sullivan, founder of Tokyo-based energy consultant Mathyos.
The ruling coalition controls about 68 percent of seats in the 475-member lower house of the national parliament, including 287 for the LDP and its allies and 35 for Komeito, according to the parliamentary website. The Democrats hold 87 seats in conjunction with the Club of Independents.
The Democrats were set to meet later Thursday. Kyodo News reported that leader Seiji Maehara would announce that the party won’t run candidates in the election and will encourage members to run for Koike’s Party of Hope.
The total number of seats is set to be cut to 465 in the next election as part of a reform aimed at reducing the excessive weight given to rural votes.
A separate poll published by the Asahi newspaper Thursday found support for Abe’s cabinet down two percentage points at 36 percent. Thirteen percent of respondents said they would vote for the Party of Hope, compared with 32 percent for the LDP.