Japanese prime minister-in-waiting Shinzo Abe came out fighting yesterday after his sweeping election victory, saying there can be no compromise on the sovereignty of islands at the center of a dispute with China and Taiwan.
China reacted with alarm to Abe’s victory, after his conservative Liberal Democratic Party (LDP) crushed opponents in national polls and he immediately restated Tokyo’s claims.
“The Senkaku islands are Japan’s inherent territory,” Abe told a press conference, referring to the archipelago Beijing and Taipei call the Diaoyutai Islands (釣魚台). “Japan owns and controls the islands ... under international law. There is no room for negotiation on this point.”
Beijing declared itself ready to work with Japan on “further development of stable relations,” but expressed disquiet at where Abe would lead Japan.
“We are highly concerned about which direction Japan will take,” Chinese Foreign Ministry spokeswoman Hua Chunying (華春瑩) said at a regular briefing. “The current task is now to properly handle the current issue” of the territorial dispute.
Abe is expected to be elected as prime minister by fellow lawmakers when parliament meets for a special session on Dec. 26.
At home, his large electoral margin boosted hopes for the country’s problem-plagued economy, with investors pushing stocks up as the painfully high yen eased. The one-time prime minister has vowed to put the moribund economy back on track after years of deflation, made worse by a soaring currency that has squeezed exporters.
Topping his agenda was a promise to pressure the Bank of Japan into more aggressive easing policies aimed at kick-starting growth as the world’s third-largest economy slips into recession.
All eyes will be on the bank’s policy meeting this week to see whether central bankers move in line with Abe’s wishes.
Investors are increasingly betting on some action, with the yen tumbling against the US dollar and euro on yesterday, while Tokyo’s Nikkei 225 stock index surged 0.94 percent by the close.
Voters on Sunday dumped Japanese Prime Minister Yoshihiko Noda three years after his Democratic Party of Japan promised a change from more than half a century of almost unbroken LDP rule. The result cost Noda his party leadership.
The rout was completed by news that the LDP and its junior coalition party New Komeito secured a large enough majority in the lower house to overrule the upper chamber.
“Control of two-thirds of lower house seats would alleviate concerns about divided control of the Diet’s two chambers,” brokerage giant Nomura said in a note. “It is also likely to fuel expectations, particularly among foreign investors, of more expeditious policymaking.”
Fukushima Dai-ichi nuclear power plant operator TEPCO was a big winner yesterday, with its shares rocketing 33 percent, leading the charge by energy firms as investors cheered the likely end to a nascent move to snuff out atomic power.