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On September 16 local time, Japan held an interim parliament and officially appointed the new Liberal Democratic Party chairman Suga Yoshihide as the 99th Prime Minister of Japan and established a new cabinet.
On the 14th, Yoshihide Suga won the presidential election of the Liberal Democratic Party of Japan. After being elected president, Yoshihide Suga said he would continue Abe’s previous policies. He affirmed that he will prioritize the prevention and control of the epidemic, revitalize the economy and implement administrative reforms to “break the vertical administration” and “break the precedent”, and establish a “people’s cabinet.”
As the new Japanese prime minister, after “taking over” Abe, how can Suga make innovations and reforms based on Abe’s policies? In response, a reporter from “Mainichi Business News” (hereinafter referred to as NBD) interviewed Dr. Jun Yuan, majoring in regional economic policy at Kagoshima University, Japan.
After Yoshihide Suga was elected the 99th Prime Minister of Japan, the future development of Japan has attracted much attention. The picture shows the press conference held by Suga Yoshihide at the Prime Minister’s residence in Tokyo, Japan, on Sept. 16, picture from Xinhua News Agency.
Japan welcomes a good time for deep reforms
NBD: To what extent do you think the new Prime Minister Yoshihide Suga will inherit the “Abenomics” policy? In what areas can you make innovations and advancements?
Jun Yuan: It can be seen from Yoshihide Suga’s previous speech that, before the next general election, Prime Minister Suga will largely inherit the “Abenomics” policy and continue with “Abenomics” for the unfinished reforms. After taking office, the focus of the job should be on this part.
But at the same time, it will also introduce unique new policies to work with the new cabinet to turn the epidemic crisis into a reform opportunity, such as creating a data bureau, reducing mobile phone communication costs, and reforming individual areas such as the reorganization of local banks.
Japan lags behind China, the United States and South Korea in terms of digitization of information, as well as an aging population and labor shortages, which must be addressed. From the policy of establishing a data agency, it can be seen that it attaches great importance to the information digitization industry. Additionally, in today’s Internet age, the ability to manage and use big information well can also help solve problems like an aging population and labor shortages.
NBD: Japan previously announced the latest GDP data for the second quarter, which was the worst single-quarter performance since records began in 1955. What challenges can the new prime minister face? The epidemic can become the norm. Is now a good time for Japan to carry out deeper reforms?
Yuan Jun: Japan’s latest Q2 GDP data was largely due to the impact of the epidemic, and Japan’s proud tourism industry was hit hard. Affected by the epidemic, the real GDP growth rate for the July-September period is expected to increase by 13.2% compared to the previous quarter. However, it only recovered around 40% of the GDP reduction from April to June, and the growth rate is expected to slow down gradually. The recovery of personal consumption continues, but on the other hand, consumption activities for face-to-face services have been slow to recover for fear of contagion.
For the new prime minister, the most important test is how to effectively carry out anti-epidemic activities. The “go travel” policy previously applied to promote economic recovery has also increased the risk of the epidemic spreading. How to do it and, at the same time, promote economic recovery Controlling the epidemic is a very important issue. Judging from the current epidemic situation, whether the epidemic in Japan cannot be well controlled, whether the Olympics can be held as scheduled next year is also a problem.
In this special period, it may be a good time to carry out deeper reforms in Japan. The epidemic has exposed many potential problems in Japan. From a long-term perspective, if reforms are carried out now to solve these problems one by one, right? Japan’s future economic recovery will also be very favorable.
China and Japan can cooperate in many aspects in the future
NBD: After the new prime minister takes office, in what areas do you expect China and Japan to cooperate with each other?
Yuan Jun: China is Japan’s largest commercial exporter and is also a major promotion country for Japan’s tourism industry. Japan’s manufacturing industry has always been in a leading position in the world, while China’s current information digitization industry is in a leading position in the world. In these two respects, the two countries can cooperate with each other and make progress together.
China has always been the main importer of Japanese labor, but with the gradual disappearance of China’s demographic dividend, the import of Japanese labor is shifting to Southeast Asian countries, but the export of Chinese labor it still has a very large group, so there is still a lot of cooperation in this area. The place.
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Jefferies: Still bullish on the Topix index
Recently, in an investigative report sent by Jefferies, a well-known investment bank, to the “Daily Business News” reporter, Sean Darby, Jefferies Global Director of Strategy, discussed the future of the Japanese market after Yoshihide Suga succeeded Shinzo. Abe as the new prime minister. The trend is predicted as follows:
In the short term, we do not expect major policy changes until the threat of the new corona pneumonia epidemic subsides. At present, there is still a public discussion on whether the Tokyo 2021 Olympics will be held as scheduled.
Although investors are concerned that the USD / JPY exchange rate will falter to the 106 level, the acceleration of the Bank of Japan’s asset purchases, coupled with the recovery in demand for business credit and the moderate returns from banks trading to the bond market, have boosted the overall growth rate of the currency. Rising to the level since the economic bubble in the late 1980s.
While the “106” exchange rate line was held, the 10-year Japanese government bond yield also rose to a positive level (0.03%). While the Bank of Japan slightly increased its holdings of Japanese government bonds, the pace of buying ETFs has slowed. Both the nominal money supply and the real money supply are increasing.
From a stock market perspective, the appreciation of the renminbi is reducing tail risk for Japanese exporters, and the unprecedented reduction in manufacturers’ inventories is a big boost for domestic manufacturers. One fact that may not have been noticed is that the worst of the export and production price deflation is over. Therefore, corporate earnings can perform well in the third quarter. Overall, Japan’s economic recovery is much faster than the market expected three months ago. Strong growth in the currency, coupled with tangible corporate earnings, should keep Japanese stock prices trending. We remain bullish on the Topix index.
Real-time consultation of the new global pneumonia epidemic
