Japan PM Abe wins extended term, faces Trump trade challenge
* Japan's Abe expected to meet Trump next week
* Abe wants to cement legacy with constitutional revision
* PM says will reshuffle cabinet, compile extra budget
* Abe says macroeconomic policy's biggest goal has been met
(Adds Trump congratulations)
By Linda Sieg and Leika Kihara
TOKYO, Sept 20 (Reuters) - Prime Minister Shinzo Abe won a
ruling party leadership vote on Thursday, putting him on track
to become Japan's longest-serving premier and to try to cement
his legacy, including by revision of the country's pacifist,
If Abe, who quit abruptly after a troubled 2006-07 term,
stays in office through November 2019, he will have exceeded the
2,886 days marked by Taro Katsura in the early 20th century.
"I want to tackle constitutional reform together with all of
you," Abe told his Liberal Democratic Party (LDP) after the
Abe, who surged back to power in 2012 promising to reboot
the economy and strengthen national defence, defeated former
defence minister Shigeru Ishiba in the LDP leadership election.
Abe won 553 votes to Ishiba's 254, a somewhat stronger
showing than expected. Of the 810 votes up for grabs from LDP
parliamentarians and rank-and-file members, 807 were valid.
Abe told a news conference he would reshuffle his cabinet
after coming back from a trip to New York for a United Nations
General Assembly gathering next week. He declined to comment on
specific posts, but the Nikkei business daily said his close
allies, Chief Cabinet Secretary Yoshihide Suga and Finance
Minister Taro Aso, would stay.
Abe also said he would compile an extra budget for relief
from the natural disasters - floods and earthquakes - that have
battered Japan in recent months.
Abe's first immediate challenge, however, is an expected
summit next week with U.S. President Donald Trump, when he will
face pressure to narrow Japan's $69 billion trade surplus with
its key ally, nearly two-thirds from auto exports.
Abe is expected to meet Trump on the sidelines of the U.N.
Trump congratulated his "good friend" Abe in a Twitter post
on Thursday and said, "I’m looking forward to many more years of
While the two leaders have forged close ties, Trump has made
clear he is unhappy with the bilateral trade imbalance and wants
a two-way agreement to address it.
Tokyo opposes a bilateral deal for fear it would boost
pressure on traditionally sensitive sectors, such as
The Trump administration is also exploring raising tariffs
on Japanese auto exports, a step officials in Tokyo say would do
serious damage to the two economies and world trade.
Abe, whose policy-makers must keep growth on track with a
dwindling policy tool-kit, said the central bank's efforts to
achieve its 2 percent inflation target, coupled with government
steps to beat deflation, had succeeded in creating more jobs.
"The biggest goal of our macroeconomic policy has been
fulfilled as a result of measures taken by the government and
the BOJ to achieve 2 percent inflation," Abe said, signalling he
was no longer insisting on hitting the elusive inflation target.
He added that he would strive to pave the way to end
deflation during his new three-year term.
After years of heavy money printing, the Bank of Japan has
little ammunition left. Japan's huge public debt and rising
social welfare costs for a fast-ageing population also leave Abe
with little room to ramp up fiscal spending.
Abe has pledged to reform social security, making it easier
for people to stay in the workforce and offset Japan's shrinking
population by raising the retirement age to above 65 and letting
them defer pension payouts beyond age 70.
He has said he will implement a planned rise in the sales
tax to 10 percent from 8 percent in October 2019, but that could
hit the economy just as Trump's protectionist policies could
hurt Japanese exports.
Revising the constitution's Article 9 to clarify the
military's ambiguous status is one of Abe's long-held goals. The
article, if taken literally, bans the maintenance of armed
forces but has been interpreted to allow a military for
The amendment would be a largely symbolic change, yet
pushing for it would be politically risky since the public is
divided. Amendments require approval by two-thirds of both
houses of parliament and a majority in a public referendum.
Ishiba favours a more drastic reform but has said changing
Article 9 was not a top priority now.
(Additional reporting by Kiyoshi Takenaka; editing by Nick
Macfie, Neil Fullick and G Crosse)
First Published: 2018-09-20 01:23:14
Updated 2018-09-20 20:02:59
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