Global Strategy Third Quarter Review
Global Macro Review
As North Korean missiles flew over the Japanese island of Hokkaido in late August and then another one in mid-September, with sirens blaring and warning the Japanese people to hide in their basements, the markets were confronted with a potential global crisis. We can only imagine what was going through the Japanese people’s minds, perhaps fearing the nightmare of a nuclear attack on their soil again. Prime Minister Shinzo Abe capitalized on this fear with his strong stance against North Korea and his call for a snap election on October 22. Prior to North Korea’s threats, Abe’s standing in the polls was battered by scandal and his decision to call a snap election is aimed to take advantage of a recent uptick in ratings. A new twist is a new party, Party of Hope, created by the Governor of Tokyo Yuriko Koike, a former cabinet minister in Abe’s government until she resigned to run for Tokyo’s governorship. Koike may not actually run in the campaign, but her party and her platform of “Yurinomics” are considered a real challenge to Abe and his Liberal Democratic party. That said, there are more similarities than differences between these parties given their conservative stance and if Abe does win a strong mandate, he will undoubtedly bring up Japan’s postwar pacifism for discussion.