If Japanese Prime Minister Shinzo Abe were to call a snap election, it could extend the country’s stock rally, but analysts say it would undermine confidence in his ability to put the economy back on a stable path in the longer-run.
Speculation is building that Abe is considering dissolving the lower house of parliament, the more powerful of the two chambers, and announcing a snap election in mid-December if he decides to postpone the 2015 sales tax hike.
“A snap election could have the virtue of giving the government a stronger mandate,” Marcel Thieliant, Japan economist at Capital Economics wrote in a note.
“But it would not be a long-term positive if coupled with a delay in the tax hike… [because it] would probably be seen as a watering down of a key element of Abenomics and could weaken momentum for further reform,” he said.
via CNBC
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.