Japan’s next government, which is likely to be led by Shinzo Abe as prime minister, has suggested it may join a US-backed Pacific-wide free-trade deal, a report said yesterday.
Tokyo has previously shown interest in joining the Trans-Pacific Partnership (TPP), but remained non-committal in the face of fierce opposition from its cosseted farming industry.
Participation by the world’s third-largest economy would give a shot in the arm to a pact seen as a key plank of US President Barack Obama’s “pivot to Asia,” and a counterbalance to China’s rising regional clout.
Referring to the possibility of joining the TPP, Abe’s Liberal Democratic Party (LDP) and its junior coalition partner, the New Komeito Party, “will pursue the best path that would serve Japan’s national interest,” they said in their final coalition agreement, the Asahi Shimbun reported.
The coalition, which is due to take office officially tomorrow, also agreed on promoting other free-trade frameworks, it said.
The comment contains a more positive note on participation in the TPP compared with the LDP and New Komeito Party’s election pledges before the Dec. 16 poll that brought Abe a landslide victory.
In an apparent move to garner farmers’ votes, the LDP had said during the election campaign it “opposes participation as long as joining the pact requires preconditions of abolishing tariffs without exception.”
The New Komeito Party had also taken a cautious stance on early participation in the trade pact.
The day after Abe’s poll victory, Japan’s major business lobby, Keidanren, urged Abe to join the trade talks “at an early date.”
“We urge the new government to participate in the negotiations of the TPP at an early date, as we have no time to waste on the issue,” Keidanren chairman Hiromasa Yonekura said in a statement.
Business lobbies say Japan’s export-oriented economy would be a major beneficiary of the promotion of a global multilateral free-trade system.
Separately, the yen dipped against the US dollar and the euro in Asian trade yesterday as Abe stepped up pressure on the Bank of Japan to set a 2 percent inflation target.
He told Fuji Television the bank’s policy board must back his proposed 2 percent inflation goal next month and warned failure to do so would mean he would amend the law that sets out its duties and guarantees its independence.
The market has welcomed his rhetoric, sending the yen lower and boosting the Nikkei index.
In Asian trade the euro bought ￥111.19, compared with ￥110.05 late on Friday in New York, while it was also at US$1.3178 from US$1.3181.
The US dollar fetched ￥84.35 up from ￥84.25.
“The yen is finding sellers, even in thin holiday trade,” said Jason Hughes, head of premium client management for IG Markets Singapore.
“The changes in political circles in Japan mean we will see a more aggressive stance in weakening [the yen],” he said.