Suga tightens grip on Japanese premier job; vows to keep Abenomics

Tokyo

JAPAN'S Yoshihide Suga pledged to maintain outgoing Prime Minister Shinzo Abe's ultra-easy monetary policies, as a surge in support within the ruling party all-but guaranteed his ascension to the premier's job.

Mr Suga, 71, told reporters on Wednesday that he was running for Liberal Democratic Party president, as he appeared to have racked up an almost insurmountable lead over his two declared rivals for a party election set for Sept 14. Among factions that have already indicated support for Mr Suga and the dozen or so lawmakers in his own non-aligned camp, his tally already stands at 276 votes, about 10 more than he would need to assume leadership of the ruling party.

"Personally, I want to continue Abenomics with a firm sense of responsibility, and bring it forward," Mr Suga told a packed news conference in Tokyo. "I'd like to keep the relationship with the Bank of Japan the same as Prime Minister Abe." He added that more should be done on monetary policy, if needed, to protect jobs and companies during the current crisis. While Mr Suga said that financial firms were now needed to support pandemic-hit companies, he added that the number of regional banks might have to be reduced over the long term.

Any sign of a departure from the path of Abenomics could send the yen surging and stocks sliding, triggering a re-evaluation of the outlook for the nation. One of the first key economic decisions of the new premier will be the timing of a switch to stimulating a return to growth rather than focusing on life-support aid for businesses and households.

The yen slipped 0.2 per cent against the dollar to trade at 106.14 at 6:50 pm in Tokyo.

Mr Suga also said he would be a continuity candidate on the diplomatic front, seeking to keep on an even keel the good ties Mr Abe nurtured with US President Donald Trump. He said he would press ahead with Mr Abe's work to resolve a territorial dispute with Russia.

Victory in the ruling party race would all but ensure Mr Suga's rise to become Japan's first new prime minister in almost eight years, since the LDP holds sway over a parliamentary vote on or about Sept 16 to confirm the new leader. The only other declared candidates - former Defence Minister Shigeru Ishiba and ex-Foreign Minister Fumio Kishida - face long odds.

While Mr Ishiba has led public surveys about who should be Japan's next leader, the party quickly coalesced behind Mr Suga after Mr Abe's surprise decision last Friday to resign due to health problems.

"No vacuum can be allowed," Mr Suga told reporters. "We have no time to lose." Mr Suga served as the backroom enforcer who helped Mr Abe turn an unlikely comeback into a record-breaking run as prime minister. As spokesman, he fended off daily questions through a series of Abe government scandals.

Mr Suga's management of the party and tighter control of the bureaucracy were among the factors that kept Mr Abe's administration on a steady path.

In contrast with his boss's rarefied political pedigree, Mr Suga hails from the rural northern prefecture of Akita and worked in a cardboard box factory when he first moved to Tokyo. He worked his way through university, before starting his political career as a secretary to a politician. He was first elected to parliament in 1996. BLOOMBERG