CHANGE IN JAPAN – AT 10:33 A.M. ET: There has been a major election in Japan, with international implications, although it has gone under our radar here. From Reuters:
TOKYO - Japan's conservative Liberal Democratic Party (LDP) surged back to power in an election on Sunday just three years after a devastating defeat, giving ex-Prime Minister Shinzo Abe a chance to push his hawkish security agenda and radical economic recipe.
Exit polls by television broadcasters showed the LDP winning nearly 300 seats in parliament's powerful 480-member lower house, while its ally, the small New Komeito party, looked set to win about 30 seats.
That would give the two parties the two-thirds majority needed to over-rule parliament's upper house, where no party has a majority and which can block bills, which should help to break a deadlock that has plagued the world's third biggest economy since 2007.
An LDP win will usher in a government committed to a tough stance in a territorial row with China, a pro-nuclear energy policy despite last year's Fukushima disaster and a potentially risky prescription for hyper-easy monetary policy and big fiscal spending to beat deflation and tame a strong yen.
COMMENT: Remember when, about 30 years ago, we thought Japan was going to take over the world, at least economically? Times have changed, and Japan has gone through a rough economic period. It's now China we talk about.
But Japan is our most important ally in Asia, and now it will have a prime minister who wants to strengthen Japanese defense and act firmly with China. I hope Obama doesn't throw the new guy under the bus.
December 17, 2012