Japan’s opposition forces appeared set to consolidate around Tokyo Governor Yuriko Koike, whose new political group narrowed a gap in opinion polls with Prime Minister Shinzo Abe’s ruling party weeks ahead of a general election.
The Democratic Party, which has been one of Japan’s top political groups for the past two decades, may decide at a meeting on Thursday whether to merge with the party Koike launched this week, Kyodo news and other domestic media reported. Abe dissolved parliament on Thursday for an election expected on Oct. 22.
In a survey conducted by the Mainichi newspaper Sept. 26-27, 18 percent of respondents said they would vote for Koike’s Party of Hope in the proportional representation section of the election, placing it second behind Abe’s ruling Liberal Democratic Party on 29 percent. A poll published in the Nikkei newspaper on Monday saw Abe’s party leading both Koike’s group and the Democrats by a five-to-one margin.
“The LDP is vulnerable as the Tokyo governor takes her policies nationwide to form a strong opposition,” Amir Anvarzadeh, head of Japanese equity sales at BGC Partners Inc. in Singapore, said in a note to clients. He added that Abe could even be facing a similar fate to that of UK Prime Minister Theresa May, who lost her parliamentary majority in a snap election in June.
Abe is looking to capitalize on a boost in his approval ratings after North Korea fired missiles over Japan, which diverted attention from cronyism scandals that had dented his popularity. Koike’s rise in the polls threatens to make the vote much closer than previously thought, potentially strengthening calls for his replacement in a ruling-party leadership contest next year even if the LDP wins the election.
Financial markets have shown little sign of concern about any political shift in Japan. The Topix index of Japanese shares is close to the two-year high hit Monday amid optimism that the Abenomics program that has brought massive injections of liquidity along with investor-friendly corporate governance reforms, will continue for another four years.
Abe has been in power since 2012, and could become the longest-serving prime minister in Japanese history if he wins the general election and the party leadership vote next year. The LDP has ruled Japan for all but a handful of years since World War II.
Abe said Monday that he wanted to test public opinion on his plan to divert some revenue from…