Exit Polls Project Sweeping Victory, Supermajority For Japan"s Abe

As widely expected, Japan Prime Minister Abe"s ruling coalition is set for a sweeping victory in Sunday"s general election, and may retain the two-thirds parliamentary majority needed to revise Japan"s constitution, according to an NHK exit poll.

Shinzo Abe during an election campaign rally in Tokyo, on Oct. 21

Shortly after polls closed at 8pm, an NHK exit poll showed that Abe’s Liberal Democratic Party and coalition partner Komeito are set to win between 281 and 336 seats of the 465 total, boosting Abe"s chances of becoming Japan"s longest serving political leader: the Prime Minister needs 233 for a simple majority and 310 for a supermajority. Opposition parties are set to split the rest, with the left-leaning Constitutional Democratic Party projected to come in second. Actual results are now being counted.

NHK also projected the leftwing Constitutional Democratic party winning 44 to 67 seats, with upstart Tokyo governor Yuriko Koike’s Party of Hope taking 38 to 59 seats.

The exit polls are in line with the most recent media seat projections, shown below:

Source: Nikkei, Mainichi, Asahi, Kyodo, Goldman Sachs

The vote took place as a typhoon lashed Japan on Sunday, threatening to damp voter turnout for the election that was widely forecast to give Abe a fresh mandate to pursue economic revival and bolster the nation"s military.  Super Typhoon Lan is one of the strongest to hit Japan in years with heavy rain expected across much of the country. The Japan Meteorological Agency issued severe weather warnings for floods, wind damage and landslides. The typhoon is projected to make landfall near Tokyo on Sunday night.

A substantial win for Abe’s coalition would pave the way for more ultra-easy monetary policy and flexible fiscal stimulus that has allowed Japan - Asia’s second-biggest economy - to grow for 6 straight quarters, if only on paper. It would also give President Trump a stable partner in pushing a hardline stance against Kim Jong Un’s regime in North Korea. The LDP is due to hold a leadership election next September. If Abe runs and wins again, he could stay on as prime minister until 2021, according to Bloomberg.

Ever the opportunist, Abe called today"s election last month more than a year before parliament’s term expired, saying he wanted to test public opinion on a proposal to divert some revenue from a planned sales-tax hike to fund education and delay moves to rein in Japan’s swollen public debt. But the timing was really mostly influenced by a recent North-Korea driven uptick in his approval rating after a series of cronyism and corruption scandals hurt his popularity earlier in the year, sending his approval rating to a record low as recently as the summer.

As the FT notes, Japan’s election has been dominated by chaos among the opposition, which also helped Abe: the Constitutional Democratic Party was set up only about two weeks ago by former Chief Cabinet Secretary Yukio Edano after its predecessor split up. Other opposition lawmakers defected to populist Tokyo Governor Yuriko Koike’s upstart Party of Hope, which briefly jumped in opinion polls before fading. In his final election appearance on Saturday, Abe attacked the opposition for its time in government from 2009-12. “Just because they’ve changed their name, they can’t change that three years and three months. You can’t fool the public,” he said.

“It’s a very tough result,” Koike was quoted by Bloomberg immediately after the exit poll was released in a televised interview from Paris, where she is attending a conference on climate change. “We have to analyze the reasons properly, but I am sorry that I caused unpleasant feelings through my words and actions.”

UPDATE: Yuriko Koike, leader of Japan"s upstart Party of Hope, responds to "tough" poll projections https://t.co/DMlsMccrg0 pic.twitter.com/BHHiHqStLV

— Bloomberg (@business) October 22, 2017

In a sign of how little hope opposition parties had of defeating Abe, Koike left the country on Saturday night to attend a mayoral meeting in Paris on climate change. Even after the Democratic party had disbanded to support her, Ms Koike declined to run, leaving the opposition without a credible candidate for prime minister.

Meanwhile, almost five years into the job, Abe touted his economic record, with unemployment at less than 3 percent and the stock market at its highest level in more than two decades, both of which are largely and exclusively a function of the BOJ monetizing every piece of debt, not to mention ETF, if can find. The massive monetary easing has weakened the yen and bolstered exports while having less success at defeating deflation and boosting pay.

Abe also portrayed his party as best placed to defend Japan against the growing threat from North Korea’s missiles and nuclear bombs. His party is considering a proposal to allow Japan to have an offensive capability for the first time since World War II.

Set to become the latest Asian nation to turn to militarism, a two-thirds majority would make it easier for him to revise Japan’s pacifist constitution, a move he sees as necessary to strengthen the military. Any change would also need to pass a public referendum, and recent polls show the public divided over the issue. The ruling coalition currently controls 68% of seats in the lower house, including 288 for the LDP and 35 for its coalition partner Komeito, according to the parliamentary website.

What happens next?

According to Goldman analyst Naohiko Baba, "a big single-party majority for the LDP would afford the Abe administration stability, leaving the economic policy framework almost intact"

Baba adds that his biggest focus is whether the LDP can secure a majority on its own. If the ruling parties attain a majority but the LDP is unable to secure a single-party majority, Prime Minister Abe could come under pressure from within his party to step down in order to take responsibility, even if the LDP/Komeito coalition continued. How the election battle will unfold is anybody’s guess. However, based on exit polls, it appears the LDP is highly likely to secure far more than a majority of votes on its own.

Such a result would enhance Prime Minister Abe’s status within the LDP, highly likely enabling him to be reelected for a third term in the LDP presidential election in September 2018 and to maintain the reins of government for longer. It would also sharply reduce uncertainty surrounding economic policy as a whole since Prime Minister Abe is able to appoint the next BOJ Governor by himself when current Governor Kuroda"s term ends in April 2018.

With the election now concluded, the calendar below lists all the main political and economic events in Japan over the next four years.

Finally, here is a breakdown of the key party manifestos of Japan"s three main political parties: the LDP, the Party of Hope and the CDP:

Wave Of Eruptions Along Pacific 'Ring Of Fire' Leave 10,000s Displaced

The Pacific “Ring of Fire” is living up to its name.

The 450 or so volcanoes that make up the ring outline have been unusually active this year, sparking evacuations on the Indonesian island of Bali and on the tiny island nation of Vanuatu. Parts of southwestern Japan, meanwhile, have been shaken by a series of earthquakes, unsettling the local population, in an area where the massive Pacific Plate grinds against other plates that form the Earth’s crust, creating a 25,000-mile zone where earthquakes and volcanic eruptions are unusually common.

Three volcanos have either erupted, or are showing signs of an imminent eruption, across the region, according to a roundup published by the Associated Press.

Japan:

The Shinmoedake volcano in southwestern Japan started erupting Wednesday for the first time in about six years. An ash plume rose 1,700 meters (5,580 feet) from the crater Thursday and ash fell on cities and towns in Miyazaki prefecture. Japanese broadcaster TBS showed students wearing helmets and masks on their way to school at the foot of Shinmoedake. The Japan Meteorological Agency is warning that hot ash and gas clouds known as pyroclastic flows could reach 2 kilometers (1 mile) from the crater, and ash and volcanic rocks are a risk over a wider area depending on wind and elevation. It raised the volcanic alert level from 2 to 3 on a scale of 5. Level 3 warns people to not approach the volcano.

Bali:

More than 140,000 people fled Mount Agung on the Indonesian resort island of Bali after its alert status was raised to the highest level on Sept. 22. Hundreds of tremors daily from the mountain indicate magma is rising inside it, prompting authorities to warn a powerful eruption is possible. The volcano spewed lava and deadly fast-moving clouds of boiling hot ash, gas and rocks when it last erupted in 1963, killing more than 1,100 people. A new eruption is likely to kill fewer people because officials have imposed a large no-go zone around the crater but it could paralyze tourism, which many Balinese rely on for their livelihoods. Indonesia has more than one tenth of the world’s active volcanoes and another two are currently erupting. Sinabung in northern Sumatra is shooting plumes of ash high into the atmosphere nearly daily, and Dukono in the Maluku island chain is also periodically erupting.

Vanuatu:

The entire population of a Pacific island was evacuated in the space of a few days in late September and early October to escape the belching Manaro volcano. The 11,000 residents of Ambae island were moved by every boat available to other islands in Vanuatu, a Pacific archipelago nation, where they’re living in schools, churches and tents. Officials have since downgraded the volcano’s danger level but say the population must wait at least two more weeks to return. The island’s water supply and crops have been affected by volcanic ash and acid rain but most villages were spared major damage. Previous eruptions of the volcano have lasted a month to six weeks.

As if the Ring of Fire wasn’t doing enough to inspire febrile visions of an apocalyptic calamity, scientists are warning that supervolcanos in Italy and the US could be headed for eruptions that would register as by far the most destructive in modern human history.

Earlier this week, scientists from Arizona State University presented research showing that when the Yellowstone caldera super volcano last erupted more than 600,000 years ago, it took barely a decade for magma flowing into the volcano’s chamber to reach a critical mass.

Volcanos, hurricanes, wildfires, earthquakes – natural disasters are seemingly happening everywhere at once.  

Perhaps the ultimate irony is that while the Trump administration is focusing its energy on foreign enemies like Iran and North Korea, the greatest threat to the American population lies within a cherished domestic landmark and symbol of national pride.