I posted on snap election musings first thing Monday, ICYMI: Japan press: "Abe set to call October election"

ICYMI, here is the gist:

  • Japanese Prime Minister Shinzo Abe is set to delay the timing for balancing a primary budget from the current fiscal 2020 to later in the decade
  • Abe will unveil the decision on Monday at a news conference
  • Also expected to announce a snap election

I posted then on the implications:

And buried in the comments to this post I stuck up a 'be careful' for Abe (perhaps he should give UK PM a call on the danger of an early election):

This from a bank note

  • Assuming he does go ahead with the new general election, opinion polls suggest the LDP would lock in a majority for another four years with more than 50% of the seats.
  • But it might be expected to lose its current two-thirds super-majority, raising doubts over Abe's ability to achieve his hopes for re-writing Japan's pacifist constitution.
  • Of course, after surprises in recent elections in Canada, the UK, US, France and Tokyo, perhaps nothing should be taken for granted these days.

OK, moving on ... this is via Barlcays (bolding mine):

It now appears increasingly likely that the lower house will be dissolved in September and a general election held in October - a possibility we highlighted in recent months. The outcome may be uncertain, but current disarray in the opposition camp suggests the LDP stands a strong possibility of retaining its single party majority.

  • If so, PM Abe could strengthen his hand and win a third term as LDP president next year, setting the stage for a longer term in office. That could reduce the domestic political risk that mounted in the wake of the Tokyo metropolitan assembly elections. If the LDP loses its one-party majority, on the other hand, the Abe administration could quickly destabilize.
  • With PM Abe at the helm, we believe that monetary policies centered around QQE+YCC would continue and that BoJ Governor Kuroda would be more likely to remain head of the central bank when a succession decision is reached around the end of this year.
  • Fiscal policy remains highly uncertain. If the post-election administration strengthens the populist tone of its policies and continues along the path of fiscal expansion, we believe the consumption tax hike scheduled for October 2019 could be postponed yet again or that the revenues could be used to finance new fiscal expansion.