Bloomberg News

Abe Hits Noda’s Economic Record as Japan Election Gets Under Way

November 16, 2012

The head of Japan’s biggest opposition party said he will make Prime Minister Yoshihiko Noda’s management of the world’s third-largest economy a key issue in seeking to unseat him in next month’s election.

“This election will be a fight to win back Japan,” Shinzo Abe told reporters at Liberal Democratic Party headquarters yesterday in Tokyo after parliament was dissolved for the Dec. 16 vote. “I will do all I can to end the political chaos and stalled economy.”

Public support for Noda plummeted as he pushed through a bill doubling the five percent sales tax in a bid to rein in the world’s largest public debt and restarted some nuclear reactors following last year’s Fukushima disaster. Opinion polls show his Democratic Party of Japan is set to lose power, making way for the country’s seventh leader in six years.

In a nationally televised press conference, Noda said he decided to call the election after reaching deals to pass a deficit financing bill and electoral revisions. Polls show four- fifths of voters support neither main party, signaling that the next prime minister may have to form a coalition government.

Abe advocates increased monetary easing to reverse more than a decade of falling prices and said he would consider revising a law guaranteeing the independence of the Bank of Japan. (8301) In an economic policy plan issued yesterday, the LDP said it would pursue policies to attain 3 percent nominal growth. The party governed Japan for more than half a century until ousted by the DPJ in 2009.

“We will take on deflation with policies in a different dimension from those the LDP implemented in the past,” Abe said.

Abe’s Return

Abe was re-elected as LDP leader in September. He resigned after serving a year as prime minister in 2006-2007, blaming a digestive complaint from which he says he has recovered.

Noda said the election “is about whether we can go forward or return to the old politics of the past,” and called for maintaining the central bank’s independence.

Abe has taken a harder line than Noda on ties with China that have frayed over rival claims to an island chain in the East China Sea. Abe favors building on the islands, known as Senkaku in Japan and Diaoyu in China, and this week sparked a complaint from China when he met the Dalai Lama and called for democracy in Tibet.

“Healthy nationalism is necessary,” Noda said. “But if we go to extremes, it becomes xenophobia. We need to pursue diplomatic and security policy more calmly and realistically.”

While calling for rebuilding trust with the U.S., Abe says he opposes promising to end all tariffs as a condition to joining U.S.-led Trans-Pacific Partnership trade talks.

Nuclear Pledge

Noda said he will pursue participation in the TPP and favors reaching a trilateral free trade pact with South Korea and China. He reiterated a pledge to end Japan’s dependency on nuclear power.

“There’s a good chance that the gap between the LDP and the DPJ actually narrows down as the polling day gets nearer,” said Koichi Nakano, professor of political science at Sophia University in Tokyo. “Noda is far from popular, but a lot of people still haven’t forgotten how Abe quit. The defeat may be somewhat limited.”

Regardless of which party wins, legislative stagnation may continue because no group has a majority in the upper house.

Support for Noda fell 6.1 percentage points to 17.3 percent, the lowest since he took office in Sept. 2011, in a poll published by Jiji Press on Nov. 15. Support for his DPJ was at 6.6 percent, the lowest since they swept to power in 2009, while the LDP’s support was at 16.6 percent.

Asked to choose which of the two party leaders would be a better prime minister, 32.5 percent of respondents to the Jiji poll picked Abe, 17.2 percent picked Noda and 50.6 percent said they didn’t know, or couldn’t answer.

Jiji interviewed 2,000 people between Nov. 8-11. There was no margin of error.

To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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