安倍晉三

Leader_Abe’s next steps

After 60 days in office – not bad for a Japanese prime minister – Shinzo Abe has not yet screwed up. By the standards of the five prime ministers who followed him after his own maladroit premiership in 2006-07, that is no mean achievement.

Mr Abe has started off confidently. His plan to reflate the economy has already borne fruit, if only, so far, in terms of market reaction to anticipated moves. He has been firm on territorial disputes with China but has managed not to inflame the situation through unnecessary nationalistic posturing. His trip to the US went well. He even managed to square the circle of committing to negotiations towards the high-level Trans Pacific Partnership without alienating the domestic farm lobby on which his party depends.

From here, though, things will get trickier. His first task is to clinch the appointment of a Bank of Japan governor willing to pull out all the stops to meet a 2 per cent inflation target. Options are narrowing. Internationally, Japan has been warned not to buy foreign bonds since this would be regarded as naked currency intervention. Domestically, Taro Aso, the finance minister, is resisting a radical appointment. Mr Abe should hold his nerve by nominating someone willing to be bold in pursuit of mild inflation.

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