Prime Minister of Japan, Shinzo Abe is set resign to after worsening health conditions.
Shinzo Abe, 65 years old, has been battling Ulcerative Colitis, a chronic digestive condition that also forced him to step down as Prime Minister in 2006-2007. During the announcement, the Japanese TOPIX pulled back with the Japanese Yen strengthening against the U.S. dollar by 0.5%.
When Abe took the role of Prime Minister, he quickly started economic reforms, which promptly coined the term “Abenomics” by economists. His economics was an attempt to help pull the country out of the GDP slump Japan were in. Before Abe was nominated in 2012, Japan's nominal GDP was the same in 1991. Deflation was also on the rise due to the increase in the aging population not willing to spend money. After a year he was elected, the stock market rose 55% alongside an approval rating of 70% at the time.
Abenomics focused on looser monetary policy, fiscal stimulus, and structural reform – most famously, implementing negative interest rates alongside quantitative easing. Immediate effects were seen, with a weakening in the Japanese Yen boosting exports and an increase in the stock market alongside a decrease in unemployment. Between 2012 and 2016, the Japanese Yen depreciated against the U.S. dollar by 50%.
It is uncertain who will take Abe’s spot. Shigeru Ishiba, the former defense minister, is regarded as the best pick from voters as he has backed economic policies more populist that Abe’s when Japan is seeing a rise in a populist movement. Other potential candidates include Finance Minister and Deputy Prime Minister Taro Aso, and Chief Cabinet Secretary Yoshihide Suga can take over Abe’s role.
With the Coronavirus creeping back up in Japan, Shinzo Abe’s resignation comes at a time where political insatiability will come as a burden to a full recovery of an already declining economy from the Pandemic.