Fumio Kishida,
Japan’s new prime minister, set out the path forward for the country Monday
after his party, surprisingly according to pollsters, secured a strong election
victory with his Liberal Democratic Party (LDP) holding onto its single-largest
party majority in Sunday’s elections. The polls on Sunday solidified Kishida’s
conservative positioning on Japan’s policies and gave him a freer hand in

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Laying out his
policy for a definitively post-Shinzo Abe Japan, Fumio Kishida said he would
pursue strong defence policies aimed at deterring China and address climate
change as well as accelerate recovery from the COVID-19 pandemic. With recovery
being top priority for Japan, Kishida is likely to loosen purse strings and his
strength in parliament may pave way for greater budgetary allocation.

increasing strength may give much-needed political stability to a pandemic-worn
Japan which was half-expecting Kishida to be one of its short-term prime
ministers. However, the results of Sunday’s elections brought relief to the
Japanese economy as stocks surged.

The Liberal
Democratic Party’s solid victory in the polls also assuaged bond market fears
of massive bond issuance because it is expected to allow Kishida to inflate the
size of a pandemic-relief stimulus package. “We will speedily implement policies
to respond to the voices of the people we have received nationwide that
strongly desire political stability and policy implementation,” Prime Minister
Fumio Kishida said at a news conference on Monday.

According to the
PM, the policy focus will be strongly on recovery from the pandemic. Kishida
has promised to work for an extra budget by the end of the year, look into
restarting a travel subsidy programme to revive domestic tourism and compile a
large-scale stimulus package around mid-November.

In addition to
recovery, Kishida’s Japan is intent on pursuing a strong defence policy in a
nod to more hawkish views of backers in the LDP who supported Kishida as its
leader. The LDP has made an unprecedented pledge to double defence funding to
2% of GDP in its party platform.