Japan's Shinzo Abe calls snap elections, seeks constitutional reform

Japanese Prime Minister Shinzo Abe has called early elections, citing the need for a new mandate in order to deal with the crisis on the Korean peninsula and for constitutional reform to strengthen the country's military.

After Abe said he would dissolve the lower house of parliament, local media reported the election would be held on 22 October.

The Prime Minister also said he was seeking a mandate to funnel the revenues from the sales tax increase scheduled for October 2019 into increased spending on social security and education, instead of debt reduction.

As recently as July, voter support for one of the country's longest serving leaders fell just below 30%, amid allegations of cronyism and of a botched cover-up by the defence minister of documents which might have swayed a debate on Japan's role in peacekeeping operations in South Sudan.

However, at the weekend a poll from Nikkei showed Abe had the backing of 44% of voters, with other recent polls handing him over 50%, on the back of recent rising tensions with North Korea.

Abe had responded with a hardline stance against provocations by Pyongyang, which had fired two ballistic missiles over northern Japan in just one month, calling for changes to Japan's Constitution in order to strengthen the country's military.

Nevertheless, roughly a fifth of those canvassed by Nikkei answered that they had yet to make up their minds, meaning it was unclear whether Abe would be able to muster the two-thirds parliamentary majority he needed in order to pass a Constitutional reform.

Another poll, from Kyodo News, put the percentage of undecided voters at 42.2%, which for some observers meant that bringing elections forwards by a year was not without risks for Abe.

Some analysts, like those at consultancy Capital Economics had in fact been hoping the tax hike would be postponed.

In parallel to the announcement of the dissolution of the lower house of parliament on 28 September, Abe unveiled Tokyo's supplementary budget for the current fiscal year, as was standard practice.

According to Capital Economics, that second budget would be the smallest since 2007 and in fact implied a "modest" fiscal tightening.

The consultancy also cautioned that the drive for constitutional reform risked dampening efforts for economic reform.

"None of this is new and it won't change the medium-term outlook for Japan's economy. The last update of the government's reform strategy, published in June, was distinctly uninspiring and contained few tangible reform steps.

"And if Mr Abe wins a two-thirds majority, he may squander precious time changing the pacifist constitution rather than on economic reforms. The upshot is that another four years of Abenomics would not be something for investors to cheer."