Japanese Premier Resigns

Face is a big thing in Japan. Hardly surprising in a country where seppuku, ritual suicide, was the norm for failure only a few decades ago. So when the Kendo Master, with the swagger in his stride, Japanese Prime Minister Ryutaro Hashimoto suffered a humiliating defeat in the yesterdays parliamentary elections his resignation was only to be expected. The ruling Liberal Democratic Party (LDP) suffered a serious defeat retaining only 44 seats of the 61 it was defending in the upper house of parliament.

There is little doubt that the voters, who turned out in unusually large numbers (over 60%), were expressing their displeasure at the governments handling of the economic crisis that has plagued Japan for almost a decade now. The question that remains is if this is a message that the new prime minister will hear, and more importantly if any government can do anything significant enough to make a real difference.

In the interim there are bound to be global consequences, the cancellation of Hashimoto’s visit to the US for starters, and rumblings in the financial markets will probably be heard later today. Which way will the Yen head?