Japan is the latest country to go against the grain, with the appointment of a new prime minister that does not have roots from the elite political class. Yoshide Suga is poised to take over from Shinzo Abe, who was forced to step down over health issues.
Japan Prime Minister
Suga is the son of a strawberry farmer and schoolteacher from the country’s rural north. The 71-year old rose to the highest office on the land, having served as a long-time chief cabinet secretary to his predecessor. He was overwhelmingly voted as the leader of the conservative Liberal-Conservative party, garnering 70% of the votes.
Mr. Suga rises to power at a time when Japan is facing its biggest test in recent years owing to the COVID-19 pandemic. The economy is officially in recession, having registered two consecutive quarters of GDP contraction. The epidemic has devastated the economy, effectively erasing gains recorded under the Abe administration.
Japan Economic Turmoil
Despite being in national politics for more than a quarter a century, Suga is yet to articulate his policies and vision for the recession-ravaged economy. He has only hinted at the possibility of sticking to Abe’s signature economic formula that entails combining easy monetary policy, government spending, and structural changes to key economic sectors.
Amid the challenges Japan faces due to the COVID-19 pandemic, most Japanese feel that Suga only needs to stay on course. Despite being the third-largest economy in the world, Japan is not known for its revolutionary reforms. Considering the current crisis environment, remaining as a crisis manager could be an asset for the new Premier.
Separately, U.S dollar weakness persisted at the start of the week as the global reserve currency weakened against the majors ahead of a key policy meeting by the Federal Reserve. The greenback plunged to two-week lows versus the Japanese Yen as positive news of a COVID-19 vaccine fuelled demand for riskier assets. U.S stocks were also on the receiving end, finishing on the red as a sell-off that started last week showed no signs of cooling off.